It looks as though the Reserve Bank of Australia (RBA) will break this year’s pattern of cutting interest rates at meetings that are followed by the release of the Statement on Monetary Policy by leaving rates on hold at 2.0% at the meeting scheduled for Tuesday 4th August. Nonetheless, our view that the RBA’s new economic forecasts will prove to be too optimistic suggests that interest rates will eventually fall below 2.0%, and we wouldn’t completely rule out a cut next week.
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