RBA 'could hold fire on rates until November'

By Mozo ·

The Reserve Bank of Australia (RBA) may be able to keep interest rates steady until November if inflation proves to be "just about tolerable" in the upcoming consumer price index (CPI) for the June quarter, an expert has said.

Speaking to the AAP, Nomura Australia chief economist Stephen Roberts forecast an annual CPI of 3.0 per cent for the June quarter when it is released in late July.

He also predicted underlying inflation measures to average out at 2.8 to 2.9 per cent – thus within the RBA’s two to three per cent target band.

"But if they get above three, then they will have no choice as inflation won’t be coming down any time soon," he said.

Mr Roberts claimed that if inflation remains at or under three per cent, the RBA may be able to hold fire on rates until November and after the September quarter CPI, which is due to be released in late October.

The comments may encourage more Aussies to compare interest rates, particularly as the RBA’s monetary tightening policy continues to have a huge impact on indebted households.

Australia’s official cash rate currently stands at 4.5 per cent.

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