Australia central bank seen holding cash rate at record low: Reuters poll

Australia central bank seen holding cash rate at record low: Reuters poll

© Reuters. An ibis bird perches next to the Reserve Bank of Australia headquarters in central Sydney

By Swati Pandey

SYDNEY (Reuters) – The Reserve Bank of Australia (RBA) will likely hold its cash rate at a historic low of 0.1% at its monthly policy meeting on Dec. 1, showed a Reuters poll of 15 economists.

The central bank is also likely to maintain its A$100 billion ($73.93 billion) quantitative easing programme, buying five- to 10-year government bonds, the poll showed.

“There has been a sea-change in RBA thinking and a raft of unconventional easing initiatives this year – including quantitative easing and aggressive (dovish) forward guidance – and we expect the board to sit back and take stock at this time,” said Nomura strategist Andrew Ticehurst.

RBA Deputy Governor Guy Debelle last week said economic recovery from the impact of COVID-19 will likely be uneven and that the introduction of a vaccine could take some time. Debelle also spoke of the risk of withdrawing policy support too soon.

“Accordingly, we expect the RBA governor to repeat existing policy guidance,” Ticehurst said.

Also on Wednesday, data will likely show Australia’s A$2 trillion economy rebounded sharply from its first recession in three decades, showed a separate Reuters poll of economists.

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