RBA is certain to keep the overnight cash rate unchanged - Westpac

Bill Evans, Research Analyst at Westpac, points out that Australia’s Reserve Bank Board meets next week on August 7 and is certain to keep the overnight cash rate unchanged at 1.5%.

Key Quotes

“While the decision will be accompanied by the usual statement from the Governor the more interesting development for the RBA will be the release of the detailed (around 70 pages) Statement on Monetary Policy on August 10.”

“On GDP we expect the Bank will retain its upbeat forecast for growth to December 2018 of 3.25% (recall that the March quarter saw growth of 1.0%) – a view that is particularly underpinned by a positive outlook for employment.”

“It is also likely to retain the 2.75% forecast for the year to June 2018 implying the Bank expects growth of around 0.6% in the June quarter.”

“Westpac is more circumspect expecting 0.5 percentage points for the June quarter and an average of around 0.6 percentage points for the September and December quarters to achieve an annual growth rate of 2.7% for 2018.”