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Speculations are that RBA will cut their official interest rate to 0.5% in March

1Mo ago 0 Replies 38 Views
Odds have shortened that RBA will cut their official interest rate to 0.5% at their March meeting next week.
Although last year having signalled its intention to continue to ease monetary policy this year, the RBA held off a further interest rate cut at its first meeting in February because of stronger housing markets.
“A further reduction in interest rates could also encourage additional borrowing at a time when there was already a strong upswing in the housing market,” the RBA minutes said.

But things have changed since then.
Recently labour market data has deteriorated with unemployment rising again and wages growth still low and stagnant.
The RBA has indicated that the labour market is the main game for monetary policy considerations.
It wants to lower the unemployment rate so wages rise, but the most recent figures show the equal highest jobless rate at 5.3% since May 2018.

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