Interest Rate in Australia
Australia - Interest Rate
RBA stands pat in June
At its 5 June monetary policy meeting, the Reserve Bank of Australia (RBA) left the cash rate unchanged at its all-time low of 1.50%, where it has been since August 2016. The move was widely in line with market expectations.
The Bank’s decision was underpinned by low inflationary pressures. Inflation remains slightly below the bank’s 2.0%–3.0% target range (Q1: 1.9%) amid mild wage growth and strong competition among retailers. Wage growth has been unremarkable and is expected to remain so in the near-term. The RBA expects inflation to rise above 2.0% in 2018.
The Bank reaffirmed, furthermore, the economy is on track to grow slightly above 3.0% on average in 2018 and 2019, supported by higher investment in non-mining business and public infrastructure and a boost in export growth. Private consumption, however, will likely be weighed down by elevated debt levels and stagnant wages. Overall, the pick-up in economic activity has yet to feed through to stronger inflationary pressures.
The Bank highlighted several new downside risks in the communiqué in June, including political instability in Italy and trade protectionism in the U.S. Nonetheless, the statement was largely devoid of forward guidance. Given that wage growth is expected to eventually gain momentum and inflation should move back within the target range this year, the RBA will likely hike rates gradually in the future, although the timeframe of monetary tightening remains unclear.
Australia Interest Rate Forecast
Met the why particular panelists on average expect mild monetary tightening this year, although several panelists expect rates to remain unchanged. Our panelists see the cash rate ending 2018 at 1.70% and 2019 at 2.23%.
Australia - Interest Rate Data
|Policy Interest Rate (%)||2.50||2.50||2.00||1.50||1.50|
5 years of economic forecasts for more than 30 economic indicators.
Australia Interest Rate Chart
Source: Reserve Bank of Australia.
|Bond Yield||2.73||1.47 %||Jun 14|
|Exchange Rate||0.76||0.05 %||Jun 14|
|Stock Market||6,130||0.08 %||Jun 14|
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June 14, 2018
Seasonally-adjusted employment increased by 12,000 in May compared to the prior month, following the revised 18,300 jobs creation in April (previously reported: +22,600 jobs) but undershooting analysts’ expectations of somewhat stronger job growth.
June 13, 2018
The Westpac-Melbourne Institute Index of Consumer Sentiment increased to 112.1 in June from 111.8 in May.
June 12, 2018
The business confidence index produced by the National Australia Bank (NAB) decreased to 6 points in May from 11 points in April.
June 6, 2018
Australia’s economy accelerated significantly in Q1 after two consecutive quarters of deceleration, according to figures recently released by the Australian Bureau of Statistics (ABS).
June 5, 2018
At its 5 June monetary policy meeting, the Reserve Bank of Australia (RBA) left the cash rate unchanged at its all-time low of 1.50%, where it has been since August 2016.