Over half of economists surveyed predict cash rate cut: Finder

Over half of economists surveyed predict cash rate cut: Finder
Over half of economists surveyed predict cash rate cut: Finder

The Reserve Bank of Australia (RBA) is likely to cut the cash rate on Tuesday, according to Finder.com.au's RBA Cash Rate Survey.

More than half (55%, 25) of the 45 experts and economists surveyed expect the cash rate to drop to 0.75% on Tuesday. 

Three-quarters (73%, 33) are predicting at least one cut will happen by November.

With three cuts in 2019 now a probability, there is a group of experts (13%, 6) who believe a fourth cut is possible this calendar year.

In fact, five economists expect the rate to go all the way to 0.25% with one predicting we get to 0%.



Graham Cooke, insights manager at Finder, said 2020 could be the year of a negative cash rate, quantitative easing, or potentially both.

“As the RBA cuts the cash rate closer to zero, they are slowly diluting their power. An injection of cash may be the only option to stimulate the economy.

“This comes on the back of [RBA Governor] Philip Lowe saying last month that ‘unconventional’ options may be used if the economy warranted it, which seems to include both the potential of quantitative easing and a negative rate.

“We are looking at uncharted waters for Australia,” Cooke said.



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