RBA May Be Playing Catch-Up

Australia’s record low interest rates are about to head way lower, analysts tell CNBC, as the country’s central bank scrambles to play catch up in the race to the bottom for borrowing costs.

“The RBA (Reserve Bank of Australia) is acting as if someone slipped tranquilizers into their drink 18 months ago. They’ve just woken up and they’re looking [at] the world around them and they’re only gradually coming to terms with what they can see,” said Michael Every, head of Asia-Pacific markets research at Rabobank.

The RBA chopped interest rates by a quarter-point on Tuesday to a historic low of 2.25 percent, surprising most economists but not the debt markets, which had priced in a 60 percent chance of a cut.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.