The decision to give room to fiscal policy bucked market expectations, which had put the chance of a rate cut at two in three.
Tuesday's decision means the RBA will wait another month before it reassesses the impact of the federal budget measures.The central bank was tipped to go to a new record low of 0.1 per cent, taking it to the brink of negative interest rates for the first time in history in a bid to unleash cheap credit, reduce saving rates and encourage Australians to borrow and shop amid the first recession in three decades.
Tuesday's decision means the RBA will wait another month before it reassesses the impact of the federal budget measures unveiled by Treasurer Josh Frydenberg on Tuesday night.The federal stimulus is expected to send the budget into a $220 billion deficit and will include fast-tracked personal income tax cuts, measures to allow pandemic-hit businesses to carry back their losses, and wage subsidies for 100,000 apprentices.
"In due course, the RBA will likely reduce the official cash rate to 0.10 per cent, but today wasn't the day," he said. "This is an appropriate decision given that the RBA already has measures in place to support Australian businesses. Tonight, it is the turn of the federal government to set out a clear agenda for recovery in what is the most important fiscal update in close to a century."
ErykBagshaw You make it sound like they have a lot of options. These clowns have one bullet left.