16 Dec 2015
RBA cash rate likely to stay at 2% in 2016 - Westpac
FXStreet (Delhi) – Sean Callow, Research Analyst at Westpac, notes that the RBA held the cash rate at 2.0% in December for the sixth straight month.
Key Quotes
“The statement was little changed, repeating the line that “the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand.”
The RBA also argued that “the prospects for an improvement in economic conditions had firmed a little over recent months.” Governor Stevens reinforced this view in his 14 Dec interview with the AFR.
Westpac expects rates to be kept on hold at 2% through 2016. The main risk to the outlook seems to be from the terms of trade, particularly if export prices continue to fall but AUD does not.”
Key Quotes
“The statement was little changed, repeating the line that “the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand.”
The RBA also argued that “the prospects for an improvement in economic conditions had firmed a little over recent months.” Governor Stevens reinforced this view in his 14 Dec interview with the AFR.
Westpac expects rates to be kept on hold at 2% through 2016. The main risk to the outlook seems to be from the terms of trade, particularly if export prices continue to fall but AUD does not.”