Economists do not expect the Reserve Bank of Australia to further lower its key rate before February, as low rates already appear to have had a negative impact on banks and households.
A recent Bloomberg survey shows that only 36% of economists predict a consecutive rate cut next month.
The central bank decided to reduce the official cash rate this month to 0.75%. This was the third reduction made by the RBA after consecutive cuts in June and July.
In the minutes of the monetary policy meeting released earlier this week, the RBA seems to indicate that monetary policy adjustments have become less effective.
"Members recognized that some channels of transmission, such as a recovery of borrowing or effects on the housing construction sector, may not function in the same way as by the past, and that the negative effect of low interest rates income rates and the confidence of savers could be more significant, "said the minutes.
Read also: What will probably force the RBA to further reduce tariffs?
David Plank, head of economic affairs at ANZ, said the tone used by the central bank to anticipate rate cuts seems to be changing.
"We think the main change is that" we would help further relax monetary policy "became" ready to make it more flexible ". a subtle change, we think it's important, "he told The Australian Financial Review.
Plank was referring to the part of the minutes which indicated that the RBA "was willing to further relax monetary policy if necessary to support sustainable growth of the economy, full employment and realization of the economy". 39, objective of inflation over time "
.
JP Morgan economist Ben Jarman said that, in addition to the RBA's change of tone and its remark about the "less effective" policy, other allusions suggest a pause next month.
"On the list of reasons to wait, the minutes note that monetary policy is already" expansionary ", the tax cuts are at stake and the mining and quarrying sectors. housing have reached a turning point, some stimulus measures should perhaps be maintained "reserve", he told AFR
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