Economists expect interest rates to remain on hold

Economists don’t expect the Reserve Bank to raise interest rates today – given the country’s slight inflation rate.

The unemployment rate has fallen to 5.5 per cent since the board met last June. It’s expected the central bank governor Philip Lowe will want to avoid unnecessarily boosting the Australian dollar with any suggestion the central bank is about to lift the official cash rate.

A higher currency would make Australia’s exports more expensive in the global market and potentially undermine economic growth.


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Economists expect the Reserve Bank to leave the official cash rate for another month at a record low 1.5 per cent, where it has stood since August 2016.

Former Reserve Bank board member, John Edwards, said last week the official cash rate could rise eight times over the next two years, based on current economic forecasts.

But other economists and financial market participants expect future increases will be much more restrained.

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