CBA economist: RBA likely to delay rate changes

Friday 22 July 2011

Article by Mozo

Domestic and international economic conditions will enable the Reserve Bank of Australia (RBA) to delay any adjustments to interest rates, according to an expert at the Commonwealth Bank of Australia (CBA).

CBA forecasts cautious RBA approach to rates

Senior economist at the financial institution John Peters told the Australian Associated Press that the latest minutes from the central bank indicate that the "bar for action" is higher than it was in the past.

"With domestic demand not picking up as expected and the global background so volatile, they can take a few more months before deciding on rates," he stated.

Despite this, he warned that a hike in interest rates was still a possibility.

At the last RBA monetary policy meeting, the board decided to leave interest rates at 4.75 per cent, the rate set in November 2010.

Earlier this week, Mr Peters' counterpart at CommSec told the Sunday Telegraph that he believed Westpac's forecast of a drop in interest rates was wrong and said they were more likely to rise than fall.

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