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POLL-Australia cash rates seen at record lows until March 2019

Published 30/05/2018, 04:30 pm
© Reuters.  POLL-Australia cash rates seen at record lows until March 2019

* Open RBA poll data: reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?s=GCR01+2H+7&st=Menu+G+C

* RBA decision due 0430 GMT Tuesday, June 5

By Swati Pandey

SYDNEY, May 30 (Reuters) - Australia's central bank is seen holding rates at record lows until next March, according to a Reuters poll, as it awaits a pick-up in inflation and economic growth.

The Reserve Bank of Australia (RBA) last cut rates to 1.50 percent in August 2016, and this record stretch of stable rates is likely to continue as analysts push back expectations for a rate hike. the 48 economists polled, 47 forecast the RBA would stand pat at its policy meeting on June 5, with one predicting a cut.

A rise in the cash rate to 1.75 percent is not seen before the June quarter of 2019, according to a median of 46 analysts, compared with last month's poll, which predicted a hike by March.

Of the 46 analysts polled, 25 predicted at least one hike by the end of June 2019 versus two who predicted cuts. As many as 19 still see no change by the RBA.

The central bank has sounded optimistic about the economy recently as a drag from the end of a decade-long mining boom draws to a close and business investment and exports pick up. All that argues against a cut.

At the same time, there is growing uncertainty around the outlook for consumer spending as the housing market slows and wage growth crawls near its slowest pace on record.

"This standoff is likely to remain in place through to early 2020 at least and its too early to rule out the next move being a cut," said Shane Oliver, chief economist at AMP.

The cash rate is seen at 2.0 percent by December 2019 from previous expectation of September, according to a median of 43 economists.

Eight respondents including Australia's biggest wealth manager AMP, Westpac Banking Corp and JP Morgan forecast a steady outlook across the horizon.

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