RBA cash rate will remain on hold throughout 2017 and 2018 - Westpac

The RBA held the cash rate at 1.5% in August as fully expected and maintained a neutral outlook which is on sync with expectations of analysts at Westpac as they expect the cash rate to remain on hold throughout 2017 and 2018.

Key Quotes

“The main change from the July statement was increased concern over the stronger currency. This was seen as weighing on inflation and potentially economic growth as well.”

“Comments on the labour market were notably more upbeat: “Employment growth has been stronger over recent months, and has increased in all states.” The RBA was also encouraged by the global economy.”

“The RBA noted that housing market conditions vary considerably around the nation though added that, “Investors in residential property are facing higher interest rates.”

“While the RBA says the “central forecast is for the economy to grow at an annual rate of around 3 per cent”, there was some increase in concern over consumer spending: “slow growth in real wages and high levels of household debt are likely to constrain growth in spending”.”

“Overall, we see no reason to change our view that the cash rate will remain on hold throughout 2017 and 2018.”