Tuesday, August 2, 2011

Citi: RBA won’t raise rates until 2012

The Reserve bank of Australia decided today to keep the interest rates unchanged at 4.75% citing the uncertainty at the global financial markets.

Analysts at RBC Capital Markets note that investors were looking forward to hawkish comments, but what they’ve actually got was a balanced statement.

Strategists at Citi claim that the central bank won’t raise the borrowing costs until 2012. The specialists underline that the RBA is not as concerned with inflation pressure as they used to think. In their view, for the central bank to hike rates in the near term the world’s economic outlook has to improve greatly and the consumer prices growth rate in the third quarter should be really high.

Economists at JPMorgan point out that the 3Q inflation data is released at the end of October, so the RBS is unlikely to tighten monetary policy earlier. The bank expects RBS to act in November.

Analysts at ICAP Australia claim that Australian dollar is clearly under bearish pressure. The pair AUD/USD went down from the July 27 maximum at 1.1079 to the levels in the 1.0880 area.

daily audusd 11-34

Chart. Daily AUD/USD

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