Reserve Bank of Australia expected to keep its 4.35% cash rate unchanged until September

The Reserve Bank of Australia will hold its key interest rate at 4.35% for a third straight
meeting on Tuesday and at least until end-September.

That’s the result showing from Reuters poll ahead of the RBA meeting. All 40 economists polled forecast that the RBA would keep its official cash rate unchanged at 4.35% on March 19.

After September the expectation is for two cuts in Q4.

Says Taylor Nugent, senior economist at NAB:

• “We are seeing below-trend growth and so we think unless
  we get a large upside surprise, it’s more a matter of how long
  they have to wait and stay in restrictive territory rather than
  being pushed higher. We certainly don’t think the RBA is going
  to be in a position to cut rates for some time yet”
• “For the March meeting, we don’t expect the RBA to change
  their communication too much. Data has come broadly in line with
  what they expect and we think they’ll need to see more evidence
  on the domestic inflation picture before really updating their
  view,”

More:

• CBA and Westpac
  see the first rate cut in September
• ANZ and NAB forecast
  it in November

This article was written by Eamonn Sheridan at www.forexlive.com.