With the Reserve Bank (RBA) ready to meet today, one economist has said that he expects rates to remain steady, with a further cut to come in August.
HSBC’s chief economist for Australia and New Zealand, Paul Bloxham, explained that he expects the RBA will keep rates on hold on Tuesday.
“From the RBA’s perspective the [Australian dollar’s] fall will be the key development affecting its policy view,” Mr Bloxham said.
Much of the movements will depend on where the Australia dollar settles, and “the recent fall in the [Australian dollar] gives the RBA time to hold steady this month. But there is still some room for it to cut further if needed,” he said.
“While growth is gradually rebalancing, we think the RBA will have room to cut further and is likely to deliver another rate cut in early August,” he concluded.