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RBA unlikely to change policy rate until mid-2015 - Nomura

FXStreet (Bali) - Charles St-Arnaud, Senior Economist at Nomura, does not expect the RBA to change its policy rate until mid-2015.

Key Quotes

Overall, Tuesday's decision to leave the policy rate unchanged was consistent with our view of a neutral policy stance and we do not expect the RBA to change its policy rate any time soon. The statement continues to show that the RBA maintains its cautiously positive outlook on the economy, despite an expected drag from resources investment and public spending in recent months."

"However, the RBA also acknowledged recent developments in the Chinese property market as a growing risk to the outlook. Moreover, in light of continued weakness in commodity prices relevant to the Australian economy, the RBA continues to express discomfort on the impact an overvalued AUD is having on the economy, despite its recent sharp depreciation."

"We maintain our view that the RBA is unlikely to change its policy rate until mid-2015. There was very little movement in rates or AUD after the relatively neutral statement. Financial markets are pricing in no change in the policy rate over the next year."

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