Cash rate cutting cycle coming to an end

The Reserve Bank is not expected to cut the cash rate on Tuesday, and further reductions look unlikely as the non-mining parts of the economy improve.

The Reserve Bank of Australia in Sydney

(AAP)

The Reserve Bank of Australia is not expected to announce an interest rate cut after its monthly board meeting on Tuesday.

All 14 economists surveyed by AAP say there will be no change to the cash rate, which currently stands at a record low of 2.5 per cent.

Only eight of those surveyed expect a rate cut next year.

The mining and resources investment boom is at, or near, its peak and other parts of the economy are expected to pick up pace and have a more significant role in driving the Australian economy.

Citigroup head of economics Paul Brennan said there is evidence that the Australian economy is starting to rebalance, helped by recent rate cuts.

"The RBA's previous assessment that the influence of previous interest rates cuts working through the economy still holds true and there is data to show that domestic expenditure is slowly improving," he said.

"Housing and equity markets and measures of sentiment have either remained largely stable or strengthened further."


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Source: AAP


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