RBA makes cash rate announcement

The RBA has once again voted to leave the cash rate on hold at 2.5 per cent.

Commsec economist Savanth Sebastian said the Reserve Bank was continuing to “preach stability” in interest rates.

“The Board believes that the cash rate is at the right level to support the economy and keep inflationary pressures in check,” he said.

According to Moody’s Analytics senior economist Glenn Levine, economic indicators remain variable.

“Inflation is at the middle of the RBA's target band,” Mr Levine said. “The housing market remains buoyant, but the rest of the economy is still soft and the [Australian dollar] remains slightly elevated, precluding an interest rate increase.

“The [Australian Bureau of Statistics'] problems with its employment data make it more difficult to get a timely read on the economy, complicating the RBA's job and cementing the case for leaving rates on hold for several more months.”

Westpac chief economist Bill Evans predicted the cash rate was unlikely to move until August 2015.

“We remain comfortable with our view that the policy tightening will begin around August next year while recognising that to date the pick-up in momentum in the Australian economy has really only been apparent in the housing market,” he said.