Data from the National Australia Bank (NAB) show that financial markets and economists predict a fall in the cash rate in 2019.
In a report from Business Insider Australia, Tapas Strickland, market strategist at NAB, confirmed this information.
"The persistent uncertainty and softer tones of the RBA have recently seen the market start lowering its prices, leaving little chance for the bank to cut rates next year. The OIS market [overnight index swap] now expects a 16% reduction on the RBA rates by August 2019, while, according to estimates, the RBA would be pending throughout 2020 ", he said. he declared.
AMP Capital's chief economist, Shane Oliver, shared the same view, predicting that the Reserve Bank of Australia would cut rates in the second half of next year.
While almost all economists in the market are currently predicting that the next RBA decision on the cash rate will be up, the vast majority do not believe this will happen before 2020 at the earliest.
RBA deputy governor Guy Debelle recently suggested that the next rate change would probably be even higher, but he also added that the bank was still willing to offer strategic support in the event of need.
"The Reserve Bank has repeatedly stated that we expect the next stage of monetary policy to be more likely than negative, albeit somewhat out of step," Debelle said. "But if that did not happen, it would still be possible to further reduce the key rate. It's the level of interest rates that matters and they can fall further. "
Debelle added that the RBA could follow in the footsteps of other central banks by borrowing from their paperback used in recent years, particularly the quantitative easing used by the US Federal Reserve as a result of the financial crisis.
"We have also been able to examine the experience of other people with other monetary policy tools and have learned from them. Hopefully we will never have to put this learning into practice, "he said. "EQ is a political option in Australia, if it is necessary."
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