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.
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