RBA Interest Rate Review – Line Ball Call

. 1 min read

The Reserve Bank of Australia review their cash rate Tuesday afternoon. Markets are split 50/50 as to whether they will cut interest rates or not.

The general election is just two weeks away and historically Central Banks sit tight this close to an election. However weakness in house prices in Sydney and Melbourne have seen many commentators call for a rate cut.

The export side of the economy has been doing very well, and the Australian Dollar has been persistently weak which has helped boost returns to the big mining companies. They in turn have being paying record amounts of tax to the government, which finds itself with an AUD 10 billion dollar surplus to tempt voters into sticking with the status quo.

Regardless of who wins the election, higher government spending is guaranteed which should help support the economy via a combination of tax cuts and infrastructure spending.  

So with 24 hours to go, it’s a line ball call and we are all waiting for the video ref to announce the decision!


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