Fitch: RBA is expected to hike rates once in 2018

Dhwani Mehta FXStreet

The US-based Fitch ratings came out with a report on the potential next policy move by the Reserve Bank of Australia (RBA).

Key Quotes:

Fitch expects the RBA to move once in the second half of this year to raise rates by 25 bps and they also expect the central bank to raise rates by 50 bps in 2019.

The RBA should remain "quite dovish" compared with other central banks around the globe as inflation and wage growth remains soft. Adding that the RBA "appears comfortable lagging behind other central banks in tightening policy, allowing exchange rate flexibility to serve as a buffer".

Australia's GDP is expected to gain momentum this year and sees growth holding steady at 2.7% in 2019 - arguing that the positive outlook is a reflection of the impact of "strong terms of trade on income, broadly accommodative financial conditions and buoyant prospects for investment".

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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