The Reserve Bank of Australia (RBA) is likely to keep its cash rate on hold at 4.75% on Tuesday. Natural disasters, both local and overseas, have created an element of uncertainty and will probably discourage the central bank from raising rates for some time. Nonetheless, business investment is set to surge and spare capacity in the economy is already low. We therefore expect the RBA to resume its policy tightening in the second half of the year and eventually to raise the cash rate by more than the markets anticipate.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services