Economists Poll Points to RBA Holding Rates This Week

Australia’s central bank is almost certain to maintain a neutral policy bias this week with a batch of data likely to point to an economy that is picking up speed, uncomfortable reading for a government preparing voters for a tough federal budget.

All 25 economists polled by Reuters expect the Reserve Bank of Australia (RBA) to hold its cash rate steady at a record low 2.5 percent and reiterate its vow to keep interest rates unchanged in the months ahead.

“While recent economic indicators have been mixed and inflation was weaker than expected, we believe that the RBA’s policy stance is firmly neutral and expect the central bank to leave monetary policy unchanged,” Nomura analyst Martin Whetton said.

“Moreover, we think the statement will continue to suggest that the RBA is not considering any changes to its policy stance and will very likely reiterate that ‘the most prudent course is likely to be a period of stability in interest rates’.”

The RBA will get another chance to hammer that message home on Friday when it releases its quarterly statement on monetary policy.

Data this week including retail sales and employment should underpin the RBA’s relatively sanguine outlook on the economy.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza