RBA issues decision on November treasury rate

Despite recent concerns about lending, the RBA has come as no surprise to experts, holding the cash rate at its all-time high of 0.1% for at least a month.

This means that all eyes are on the December RBA decision.

According to CreditorWatch chief economist Harley Dale, “the RBA’s monetary policy announcement in December will be the biggest of 2021, followed by the Melbourne Cup Day update.”

“November 2sd is race day; December 7e is game day, ”he joked.

Mr Dale said there had been tentative signs of re-emerging inflationary pressures, “although heavily influenced at this stage by pressures related to COVID.”

“The rapid easing of lockdown restrictions has opened up pent-up demand for consumer services. Many companies are about to leave and as vaccination levels reach critical levels required, the outlook is positive.”

But, he warned that the future “has no shortage of bumps.”

“We all knew we would hit this in the December 2021 quarter, but now we’re living it. Openness means significantly higher demand and better times for small and medium-sized businesses. A key issue is that this changing economic environment is occurring in a landscape of persistent supply disruptions, ”the economist stressed.

He pointed out that this backdrop could create a difficult business environment for many SMEs – economic recovery does not have to happen in a straight line.

“It would be nice to tell a universally positive story, but that is the nature of the pandemic,” he conceded.

All the while, the RBA is under the pump as the prospects for earlier-than-expected interest rate hikes increase.

Mr. Dale said everyone now expects market interest rates – even without the presence of official changes to cash rate policy.

“While economic conditions sometimes change in changing and sometimes revolutionizing ways, the RBA is sticking to its record interest rate policy, but not necessarily when the time is right,” he said.

“On December 7, we will receive the final statement from the RBA until February 1, 2022. The December statement will be a key update as the Bank has had the opportunity to review an increasing amount of information regarding economic results after foreclosure.

RBA issues decision on November treasury rate



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Last updated: November 02, 2021

Posted: 02 November 2021

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