The Reserve Bank of Australia on Tuesday kept the cash rate steady at 2 per cent for the third month in a row, but left the door ajar for a further cut this year.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Of the 28 economists surveyed by Bloomberg ahead of Tuesday's meeting, only three had tipped a cut, to 1.75 per cent. Interest rate swap market pricing had also discounted any chance of further policy easing at the August meeting.
The central bank last lowered rates a quarter of a percentage point in May, following a similar cut in February after 18 months on hold.
Despite some patchy economic data since then, the RBA seems reluctant to make a third cut, partly on concerns about Sydney's overheated property market and household indebtedness but also because of its own doubts about the efficacy of lower rates at this stage of the current cycle.
The case for leaving rates unchanged received a further boost earlier on Tuesday, when the Australian Bureau of Statistics reported a 0.7 per cent month-on-month jump in retail turnover.
The increase, which was almost double market expectations, reflected May budget measures to help small business and the pick-up in house-building and investment.
