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RBA likely to keep interest rates on hold in 2020 – Goldman Sachs

The Reserve Bank of Australia (RBA) is likely to keep interest rates unchanged at a record low of 0.75% through 2020, unless there is a steady rise in the unemployment rate over a couple of months, according to analysts at Goldman Sachs. 

Other investment banks like Westpac, Commonwealth Bank of Australia expect the RBA to cut rates to 0.5% in the second quarter.

Key quote

Rates on hold in 2020 now look to us the most likely scenario – particularly given Governor Lowe’s renewed concerns around low rates, house prices & financial stability.

Goldman Sachs has downgraded its first-quarter GDP growth forecast for Australia to 2.4% from 2.7%, citing bushfire and coronavirus drag. The risks to that forecasts are skewed to the downside, the investment bank said.
 

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