No rate cut in March say economists, but major banks divided: Bloomberg

The majority of economists expect the Reserve Bank to leave the cash rate on hold at 3% at its March 5 monetary policy meeting.

Of the 28 economists polled this week by Bloomberg, 20 except the cash rate to remain unchanged.

However, the major banks are divided on this issue with ANZ and Westpac tipping a rate cut to 2.75% and NAB and the Commonwealth Bank expecting the RBA to hold firm.

The other respondents tipping the cash rate to fall in March are all investment banks with a strong foreign flavour.

Joining Australia's Macquarie Bank forecasting a rate cut are French bank BNP Paribas, German bank Deutsche Bank, American banks Merrill Lynch and Goldman Sachs and Malaysian-based CIMB.

The majority of economists don’t expect a rate cut in April either (18 out of 28) while a small majority (17 out of 28) expect a rate cut in May.

Macquarie Bank and Goldman Sachs expect two rate cuts by May taking the cash rate to an all-time low of 2.5%.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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