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The Reserve Bank of Australia has delivered the decision of its monthly board meeting.
Board members have decided to cut the official cash rate to a record low of 1.50 per cent.
In a strongly divided result, 23 of the 41 (56 per cent) experts surveyed by financial comparison website finder.com.au believed that the Reserve Bank would slash the official cost of borrowing today.
Many of the experts cited July’s low inflation results as the main reason for the RBA’s decision.
“The RBA will be hesitant to push the cash rate lower than it already is, however the June quarter inflation figures are well below the RBA’s target band of 2-3 per cent, making an August rate cut likely,” Robert Montgomery of Infrastructure Partnerships Australia said.
Leanne Pilkington of Laing+Simmons echoed this sentiment, adding, “In the end, with inflation at its weakest in nearly 20 years, we believe the RBA will move to drop the cash rate”.
University’s Dr Mark Brimble commented that July’s CPI figures remained well below the RBA’s target range, which in conjunction with expected large scale job losses from heavy manufacturing next year and a “stubborn” currency made it likely that the RBA would choose to cut rates to offer further support to the economy.