RBA expected to keep rates on hold; Federal government cagey on budget papers: Midday Roundup

RBA expected to keep rates on hold; Federal government cagey on budget papers: Midday Roundup

The Reserve Bank of Australia is expected to keep interest rate on hold at 2.5% later today, making it the 12th consecutive month rates have remained at a record low.

The RBA last changed the rate in August 2013.

RP Data research director Tim Lawless said in a statement the decision will come at a time when value growth across the housing market is continuing, albeit at a more moderate pace than late last year.

“Although the rate of growth is slowing, policy makers, including the RBA, are likely to be keeping a close eye on the ongoing increases in home values across the two largest cities (Sydney and Melbourne),” said Lawless.

“It is looking increasingly like the official cash rate will remain at its low setting, at least for the remainder of this year, which should continue to support housing demand.”

Federal government cagey on budget papers

The federal government is reportedly withholding Treasury documents detailing how the budget would affect different household types, according to Fairfax.

Fairfax reports it requested modelling papers prepared before the budget under freedom-of-information legislation, but said two documents showing how spending cuts would hit poorer households were withheld from the FOI request.

Fairfax believes these documents show clearly how the less wealthy households would suffer far bigger falls in disposable income than richer ones, especially for families with children aged between six and 16.

It is unlikely the documents will ever be seen as they are protected from FOI requests on the grounds they were prepared for the cabinet.

Market cautious ahead of rates announcement

Australian shares have opened flat as investors remain cautious ahead of today’s RBA announcement.

The S&P/ASX200 benchmark was down 21.2 points to 5519.7 points at 12:03pm AEDT. On Monday, the Dow Jones closed 75.91 points up, rising 0.46% to 16,569.3 points.

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