Reserve Bank makes monthly interest rate announcement

Reserve Bank makes monthly interest rate announcement

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The Reserve Bank of Australia has announced the outcome of its monthly board meeting.

The official cash rate was left at a record-low 2.5 per cent for the 12th consecutive month, as most experts had forecast.

All 15 economists surveyed by AAP had expected the cash rate to remain on hold, as had all 21 economists surveyed by comparison website finder.com.au.

AMP Capital chief economist Shane Oliver told finder.com.au that not enough had happened since the July meeting to convince the Reserve Bank to change the cash rate.

“The economic data has been somewhat mixed. There have been good housing indicators, some solidness in retail sales, but nothing dramatic, and certainly not enough to signal a change,” he said.

ANZ chief economist Warren Hogan said the economy had been playing out as expected, with an increase in non-mining investment offsetting a downturn in mining investment.

“The higher Australian dollar is acting as modest constraint on the economy. Housing continues to do well but without signs of excessive credit growth,” he said.

Westpac chief economist Bill Evans told finder.com.au that the Reserve Bank was waiting for some sort of change in the economy before committing to any policy option.

“Despite market pricing now pointing to a rate cut over the next six months there's no evidence in the minutes to indicate that the board is seriously considering this option,” he said.

The Reserve Bank forecast last month that the cash rate would remain at 2.5 per cent for at least one more year.

The consensus among the economists surveyed by finder.com.au is that the Reserve Bank will move some time in 2015, with the cash rate tipped to eventually rise to four per cent.

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