The Bull

Tuesday 13

November, 2018 7:17 AM



No change expected in cash rate

No change expected in cash rate

For the 27th month in a row, the central bank is tipped to keep Australia's official cash rate at 1.5 per cent.

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By AAP 05.11.2018 11:22 AM

The Reserve Bank is expected to hold its horses on Melbourne Cup day, keeping the official cash rate at its record low.

Economists widely predict the central bank will keep the cash rate at 1.5 per cent for the 27th consecutive month at its November board meeting on Tuesday.

The RBA last cut the rate in August 2016, paving the way for the longest period without a change in modern history.

The authority has signalled things aren't likely to change for some time.

Governor Philip Lowe in October said weak household spending remains a source of uncertainty for the economy and was a factor in the central bank's decision not to move the rate yet again.

But he also pointed to a falling unemployment rate.

Capital Economics is among firms expecting business as usual from the RBA in November, ahead of a change of rate from late 2020.

"The RBA will hold its horses on Melbourne Cup Day," its economist Marcel Thieliant said.

"While it will acknowledge the sharp fall in the unemployment rate it will probably continue to signal that a rate hike in the near-term remains unlikely."

Westpac also believes that the rate won't change until 2020.

But the other three big banks are expecting a rise next year, while a recent Bloomberg survey of economists' forecasts found just one in 10 thought the rate would be the same by the end of 2019.

"So the case for rates on hold is certainly not a universally accepted one," Westpac chief economist Bill Evans said.

The RBA is also due to release its November statement on monetary policy on Friday.

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