Will Australia's central bank keep interest rates steady, increase or cut them?
Most economists agreee the Reserve Bank of Australia will keep interest rates on hold when it hands down its decision on the official cash rate at 2.30 pm on Tuesday. The interest rate the bank charges lenders to borrow money is sitting at 4.35 per cent, as it has all year. The release last month of the jobs data for June led to speculation the bank could raise interest rates, because unemployment went up while more jobs were created than expected and inflation remained sticky.
chief economist Paul Bloxham expects the RBA will keep rates hold for the rest of the year, even with other advanced economies cutting rates or signalling that way. The RBA started hiking later than other central banks, lifted less than its peers and was dealing with weaker productivity growth, the economist said. AMP chief economist Shane Oliver said the experience in the US meant the RBA should consider a rate cut this week.
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