Australia | Aug 02 2006
By Greg Peel
The Reserve Bank of Australia has lifted the cash rate by 25 basis points to 6.00% as everyone in the market expected it would.
Some fringe-dwellers were concerned that we may have seen a 50 point rise, but sanity has prevailed.
A more extensive commentary accompanying the rise will not be released until Friday, as is always the case. It is then we will be privy to the RBA’s logic and hopefully we will get some indication of whether another rise in 2006 is likely or unlikely. The general expectation is that the RBA’s rhetoric is to remain hawkish for a while still.
The market is still split on what the future holds, as are the futures markets. History shows McFarlane is not one to act in haste, and nor is his successor, Glenn Stevens, who has finally been confirmed as the next Chairman, to the surprise of no-one.
The major plus from this appointment is the removal of any uncertainty on the successor front. A new deputy is yet to be named.