The Reserve Bank of Australia has delivered the result of its monthly board meeting.
As expected, board members decided to leave the cash rate at a record-low 2 per cent, where it has been since May.
The RBA’s decision to keep the cash rate unchanged following this afternoon’s board meeting was no surprise, with 31 of 32 economists and experts in the finder.com.au Reserve Bank Survey overwhelmingly tipping this outcome.
The survey also found that 78 per cent of experts (25 experts) are expecting no change to the cash rate this year, while 16 percent (5 experts) believe it will cut by the year’s end.
More than half (53 percent) of the experts expect the cash rate to start rising in 2016 (with the fourth quarter of the year the most likely period), while 44 percent of experts surveyed believe a cash rate rise will occur beyond 2016.
Defying the trend, one expert – Mark Crosby of Melbourne Business School – predicts a rate rise will occur by the end of 2015.
Mortgage Choice chief executive John Flavell said a strong bounce back in consumer sentiment and sustained property price growth has encouraged the Reserve Bank of Australia to leave the official cash rate on hold for the fourth consecutive month.
“Over the last month, the domestic economy has shown signs of improvements, with consumer sentiment and property prices both on the rise,” Mr Flavell said.
According to the latest data from the Westpac Melbourne Institute of Consumer Sentiment, confidence climbed 7.8 per cent in August to 99.5.
“While there were no significant milestones or events to warrant the bounce back in confidence, it is likely that ongoing positive news around house prices may have buoyed confidence,” Mr Flavell said.
“Over the last quarter, property values have continued to climb, with prices soaring 5.5 per cent across the combined capital cities,” he said.
“Of course, just because the Reserve Bank has decided to leave the cash rate on hold again today, doesn't mean we can rule out further cuts in the future.”
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