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RBA expected to leave rates on hold

Economists and financial markets see little chance of a change in interest rates when the Reserve Bank next meets.

The Reserve Bank is likely to hold its benchmark interest rate steady at its Tuesday meeting, with the main focus set to be on potential signals of future moves.

All 13 economists surveyed by AAP expect the cash rate to be held at its all-time low of 1.5 per cent when the central bank's board meets on Tuesday.

The futures market indicates the chance of a rate cut is just five per cent.

The RBA has cut interest rates twice in the past four months in a bid to boost sluggish inflation.

But the cuts are yet to show up in official data.

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"We expect the RBA to hold steady and point out that it is waiting to see the full effects of the cuts that have just been delivered," HSBC chief economist Paul Bloxham said.

Commonwealth Bank economist Gareth Aird said the focus would be on RBA governor Glenn Stevens's statement, which will be his last before his deputy Philip Lowe takes over.

"On that score, we will be looking for the governor's latest views on the housing market, labour market and Q2 capex survey," Mr Aird said.

Royal Bank of Canada chief economist Su-Lin Ong said the RBA provided its full marco-economic rundown its statement in August, when the cash rate was cut by 25 percentage points.

"A period of stability seems likely to stretch into next year," she said.

"The language in the post-meeting statement will likely border on plain and provide little forward guidance."


2 min read

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Source: AAP



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