The RBA extended its inaction at last week’s monthly Board meeting, deciding to hold the Official Cash Rate steady for a second month, with very little change in the Governor’s accompanying statement. The easing bias was retained, but not even the sharp fall in the iron price prompted the RBA to act on the bias, at least this month anyhow.
"The Board judged that it was appropriate to hold interest rates steady for the time being," RBA Governor Glenn Stevens said in a statement. "Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target."
Although 75% was priced in by markets, the majority of economists were expecting no change this month, instead leaning towards May as the most likely timing for a move. It will be at the May meeting that RBA staff will present the Board with updated forecasts for growth and inflation.
There has been a slight wind back of expectations for the cash rate in the futures market with a terminal cash rate now at 1.70%, from 1.60% a week ago (refer chart below).