The Reserve Bank of Australia has played it safe again this month, with the Board opting to leave the official cash rate on hold at 2.5 per cent for the 11th consecutive month.
The RBA’s decision would likely be based on the fact that consumer sentiment remains fairly sluggish and property values were fairly stagnate in June.
According to the latest Westpac Melbourne Institute of Consumer Sentiment, confidence climbed just 0.2 per cent in June. Overall, consumer sentiment remains 6.6 per cent below the pre-Budget level recorded in April and 15.6 per cent below the post-election high recorded in November last year.
On top of that, research conducted by RP Data found property values climbed by 1.4 per cent in June after suffering a 1.9 per cent drop in May.
Moving forward, I expect the Reserve Bank of Australia to leave the official cash rate on hold for some time yet.
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