RBA 'unlikely to increase cash rate in 2011'

Monday 05 September 2011

Article by Mozo

The Reserve Bank of Australia (RBA) is unlikely to hike interest rates before the end of 2011, an expert has stated.

Interest rates 'unlikely to be increased this year'

Annette Beacher, head of Asia-Pacific Research at TD Securities, observed that there are signs that inflation is starting to ease and that the rapid rise in prices seen earlier in the year appears to have abated, reports the Australian Associated Press.

"The RBA board is in the enviable position of being able to watch and observe from the sidelines for some time to digest the implications of the domestic two-speed economy," she stated.

It can also take its time in assessing the volatility of global financial markets and contemplating the implications this has for Australia, Ms Beacher asserted.

The board of the central bank is set have its monthly meeting tomorrow and will announce its decision on whether the cash rate will be changed from its current 4.75 per cent level.

Ms Beacher's forecast is in line with that of chief economist at the Commonwealth Bank of Australia Michael Blythe, who earlier this month told Reuters that interest rates are unlikely to be pushed up during September.

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