The central bank acted as most economists predicted, holding the cash rate at 0.25 per cent, having previously stated it does not believe negative rates are effective.
Sarah Hunter, BIS Oxford Economics highlighted before the announcement that the RBA has no interest in moving the cash rate.
"The RBA have made it clear that, for now at least, they don't see negative rates as being necessary or effective. So I think the next move will be up, but it will be quite some time into the future,” she said.
CreditWatch CEO Patrick Coghlan told investors to watch out for changes in September.
"While positive sentiment has increased in recent weeks as the economy and trade starts to open up, the big concern is what happens in and around September when the stimulus (consumer & commercial) packages potentially come to an end – namely, job-keeper, jobseeker, rental abatement, a home loan repayment reprieve (mortgage holidays), insolvency/bankruptcy legislation and safe harbour changes”, he said.
"There’ll be a serious shock to the economy as people are once again forced to start paying the bills and/or stop receiving government incentives.”by Cameron Micallef | July 07, 2020
Tuesday, 7 July 2020