Reserve Bank of Australia preview – to keep the cash rate on hold, retain tightening bias

What to expect from the Reserve Bank of Australia on Tuesday, summary comments via Commonwealth Bank of Australia

  • We expect the RBA to leave the cash rate on hold at 4.35%
  • We ascribe a 90% chance to no change and a 10% probability to a 25bp increase (we consider the risk of any other move to be immaterial).
  • The RBA Board is now data dependent and the economic data released since the November Board meeting does not support another rate increase in December.
  • We expect the RBA to retain their tightening bias and expect no changes to current forward guidance.
  • A no change decision is anticipated to be accompanied by the line, “whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks.”

The Reserve Bank of Australia meet tomorrow, the statement is due at 2.30pm Sydney time on Tuesday, 5 December:

  • 0330 GMT
    and 2230 US Eastern time on Monday, 4 December 2023

This article was written by Eamonn Sheridan at Source