The RBA board left its cash rate unchanged of 4.35% after its second two-day gathering of 2024 concluded on Tuesday afternoon.
The Reserve Bank is widely expected to maintain its key interest rate during this week’s board meeting, though economists hold differing views on when borrowers might anticipate relief.
The central bank is scheduled to reveal the outcomes of its second board meeting for 2024 on Tuesday. Analysts and investors anticipate the RBA to keep its cash rate steady at its 12-year peak of 4.35%.
Australia experienced a relatively gradual increase in official interest rates compared to similar economies, with rates not reaching as high. This smoother rate trajectory is one factor leading independent economist Saul Eslake to predict that the first rate cuts won’t occur until next February.
Eslake suggests that this cautious approach was partly aimed at “preserving as much as possible of the gains that have been made in reducing unemployment and underemployment in recent years.” However, the consequence is that Australia’s interest rates are likely to decline at a slower pace compared to elsewhere.
All four major commercial banks anticipate the RBA initiating rate cuts within this year. Among them, the Commonwealth Bank is the most assertive, forecasting the equivalent of three 25 basis-point reductions by the end of 2024.
