RBA Holds Its Policy Nerve on Rates

The Reserve Bank of Australia (RBA) has decided to keep the cash rate unchanged at a record low of 2%, aligning with predictions from 27 surveyed economists. The statement accompanying the decision indicates that low inflation provides the RBA with the flexibility to ease monetary policy if necessary. Market reactions included a slight strengthening of the dollar following China's rate cut. Looking ahead, while no changes are expected in April, predictions for the third quarter vary, with some economists forecasting a rate rise to 2.25% and others a cut to 1.75%. The RBA's future moves remain uncertain.

What was the cash rate decision made by the Reserve Bank of Australia?

• Hold the rate at 2%

• Decrease the rate to 1.5%

• Increase the rate to 2.5%

• Eliminate the cash rate

What factor gives the RBA room to ease the cash rate if necessary?

• Low inflation

• Strong economic growth

• High inflation

• Weak currency

What was the market reaction to China's rate cut?

• The dollar weakened slightly

• The dollar rose sharply

• The dollar remained stable

• The dollar fell sharply

What is the predicted cash rate change by some economists in the third quarter?

• Decrease to 1.5%

• Increase to 2.5%

• Increase to 2.25%

• Decrease to 1.25%

What is the most common prediction for the cash rate in the third quarter?

• Increase to 2.25%

• Decrease to 1.75%

• Hold at 2%

• Increase to 3%