This decision means the official cash rate hasn’t moved for two years or 22 meetings in a row, which is a record. And it could still be another two years before rates are moved, according to one senior economist.
Shane Oliver, Chief Economist at AMP Capital, said, the statement from the RBA explaining its decision revealed continued the bank’s long-term economic narrative. “[The RBA] made no major changes to its underlying growth outlook where it sees growth picking up a bit above 3%. However, [the RBA] continues to see the consumer spending outlook as uncertain, while there was a reference to the drought affecting large tracts of the eastern states, as well as the slowing Chinese economy and the US’s uncertain trade policy.
While the RBA seems to be taking softer property prices in some capital cities in its stride, Shane believes the central bank will be monitoring the situation closely. “[The RBA] would be aware that when house prices and auction clearances have been this week, in the past, it has actually started cutting interest rates,” noted Shane.