The Reserve Bank of Australia (RBA) is expected to leave the policy cash rate unchanged at 2.00% at the Monetary Policy Committee (MPC) meeting on 5 June. It is believed that the RBA will maintain an easing bias, which it restated in its quarterly Statement on Monetary Policy, as it was missing from the statement following the May meeting. The central bank will wait for its 50bps of rate cuts in the past four months to filter through to the economy. It is likely to find comfort in ‘recent encouraging trends’ in housing demand and to believe its previous rate cuts will stimulate further business investment. The central bank is also likely to reiterate its view that the Australian dollar is unsustainably high and that ‘further depreciation seems both likely and necessary’.
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