RBA to cut rates in July — Westpac

Economists at Westpac stated that the Reserve Bank of Australia (RBA) is likely to cut interest rates at its July meeting. Previously, experts had anticipated the regulator would reduce borrowing costs in August.

According to Westpac, weaker-than-expected May inflation data supports the case for earlier monetary easing. However, RBA officials may still prefer to await the release of the consumer price index report for the second quarter before adjusting their policy stance.

Meanwhile, the organization projects a terminal rate of 2.85%, implying three additional cuts following the July meeting. As Westpac economists note, recent Australian labor market data may have reinforced the central bank officials' concerns. That is why, the regulator will maintain a cautious approach to borrowing costs.

Commonwealth Bank of Australia also anticipates a 25 basis point rate cut by the RBA in July.