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RBA keeps interest rates on hold at record low

The Reserve Bank of Australia has today kept the national interest rate on hold for the 20th month in a row.

Further still, the RBA is expected to remain steady at the 1.5% cash rate for some time to come.

In its summary, the Reserve Bank made mention of the Royal Commission and the impact it might have on consumers and banks behaviour.

Head of Asia Pacific Research at TD Securities Annette Beacher joins Ross Greenwood.

“[The RBA ] hinted that the banking Royal Commission and the impact on the real economy may be a little overblown,” she says.

Ms Beacher says while the RBA is wary to distance themselves from topics like this to avoid sensationalised headlines,  it’s helpful in the long run for them to keep an eye on the strength of bank balance sheets.

Ms Beacher also admits it’s a strange time for the economy, and we seem to have two sides to every story.

Click PLAY for the full interview with Annette Beacher

Managing Director of PIMCO Sydney Robert Mead tells Ross we may not see a change to interest rates until the back end of 2019.

Mr Mead agrees if a global downturn were to occur, the RBA would have less ammunition to throw Australia.

“That’s the case when you look pretty much everywhere globally, that central banks have barely been able to move.”

Mr Mead says a recession could be on the horizon within the next three to five years if investment doesn’t keep up with changes to the global economic environment.

“We’ve been in this situation where central banks have been doing whatever it takes to ensure that there’s risk-taking, to ensure that there’s growth, and to ensure that volatility stays low.

“Really we’re just saying that environment’s not going to be with us for the next decade and investors should be preparing differently for this new environment.”

Click PLAY below to hear from Robert Mead 

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