RBA Preview: 50 bps is not a given, it could be just 25bps – Scotiabank RBA CentralBanks Banks InterestRate
“A few days before the release of the minutes but after the meeting itself, Governor Lowe said he hoped that the cash rate would come to rest within a 2.5–3.5% rate with ‘a few’ more rate increases over coming meetings. This suggests that there is considerably more work to be done with the 2.35% current rate below the bottom of the range.”
“The Australian dollar has been among the casualties in the face of the US dollar’s broadly based strength and has shed another couple of cents since then along a long-term declining trend from about 76 cents in April to roughly 65 cents now. This development might suggest a more pressing need for a bigger 50bps hike given the implications of ongoing currency weakening for import price pressures.”
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