Login
ISCOVER
Jessica Darnbrough
Brokers are split as to whether the Reserve Bank will cut rates this afternoon.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
According to the latest The Adviser straw poll, 51 per cent of brokers expect the RBA to cut rates at least 25 basis points at its November Board meeting today.
Of the 437 respondents, 49 per cent believe the RBA will err on the side of stability and keep the official cash rate on hold at 4.75 per cent.
Loan Market Group’s Jamil Allouche is one broker that believes the Reserve Bank will keep rates on hold.
Speaking to The Adviser, Mr Allouche said the data coming out of the economy wasn’t strong enough to warrant a rate cut.
“I believe the RBA will keep rates on hold. There just not enough reasons to cut rates at the moment,” he said.
But not everyone agrees.
Vow Financial’s chief executive officer Tim Brown said he wouldn’t be surprised to see rates fall today.
“The latest CPI data showed benign inflationary growth, which could just push the Reserve Bank over the edge and force them to cut rates,” he said.
Last week, CPI rose just 0.6 per cent for the quarter – well within the Reserve Bank of Australia’s safety zone.
According to Mr Brown, the softer CPI outcome, and in particular the lower near-term outlook means the RBA can relatively safely provide some near-term stimulus to the underperforming interest sensitive sectors of the economy.
Whatever happens today, one thing is clear: the case for a rate hike is now non-existent.
