Australia Central Bank Poised for Interest Rate Cuts Next Month
A majority of economists polled by Bloomberg anticipate the Reserve Bank of Australia (RBA) will reduce interest rates next month, marking the first monetary easing in over four years.
Key Findings:
* 20 out of 23 respondents predict a rate cut to 4.10% on February 18th.
* Market pricing suggests a 90% probability of a reduction.
* Core inflation eased more than expected in Q4, approaching the RBA's target.
* The RBA will announce its rate decision alongside updated economic forecasts.
* This would be the first easing since November 2020, when the RBA cut its rate to a record low of 0.1%.
Economic Context:
Higher interest rates have weighed on the Australian economy, resulting in weak private sector demand and a slowdown in household consumption. However, the jobless rate remains low at around 4%.
Analyst Viewpoint:
"We do not believe rate cuts are necessary due to a weak economy, but rather due to a lower inflation path that allows for a gradual easing of monetary policy," said Andrew Ticehurst of Nomura Holdings Inc.