It came as no surprise as the Reserve Bank left the official cash rate untouched at its March meeting. However, there is increasing speculation from market commentators around when rates will begin to rise.
Nearly all economists predicted the RBA would keep the cash rate at its historic low of 1.50 per cent this month. In fact, the ASX’s ‘RBA Rate Indicator’ last week said there is a 100 per cent chance of a hold and some experts have begun revaluating when the most likely time for a rise will be.
Having both previously predicted a double rate rise this year, ANZ and NAB have scaled back their predictions. NAB Chief Economist, Alan Oster, said there is the possibility of a single rate rise in November this year, while ANZ’s Head of Australian Economics, David Plank, viewed early 2019 as the most likely time for an increase.
The RBA’s March meeting marks the 19th consecutive month without a rate change and well over seven years since the last rate rise which was back in November 2010. The main factors influencing the RBA’s decision remain the same: slow levels of employment and wage growth - which are keeping pressure on household budgets - coupled with continued weak inflation.