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Economists from major banks unanimously call for the Reserve Bank of Australia (RBA) to continue its hold stance on cash rate for the month of September.

The RBA has refrained from increasing the cash rate for the past two months, keeping the official rate at 4.10%.

The latest monthly inflation data, which came in at 4.9% in July, solidified the forecast of the economist that the RBA will likely hold.

The unemployment rate also rose to 3.7% in July — according to the RBA, this rate needs to hit 4.5% to help inflation reach the target of 2% to 3% in time.

Below are the recent statements from major bank economists regarding their September cash rate projections:

ANZ – Hold at 4.10%

ANZ head of Australian economics Adam Boyton said it is likely that the RBA will stay on hold in September.

“We see the broad balance of the data flow and events being unlikely to shift the Board from its on-hold stance,” he said.

However, Mr Boyton said the RBA will continue to put forward the messaging that would say that “some further tightening may be required to ensure that inflation returns to target.”

CommBank – Hold at 4.10%

CommBank senior economist Belinda Allen said there are no catalysts to push the cash rate higher in September.

“We expect the cash rate to be on hold for the remainder of 2023 as prices, wages and activity data indicate no further tightening is required,” she said.

“We then expect an easing cycle to commence in Q1 24, although the clear risk is a later start date.”

NAB – Hold at 4.10%

NAB economists for Markets Taylor Nugent said while it is expected that inflation will moderate further over coming quarters, recent results will not be inconsistent with the RBA’s near term forecast.

“The RBA saw a credible path to return inflation to target at the current cash rate in August, and given the recent flow of data, is likely to retain that assessment in September,” he said.

“NAB expects the data flow over the next few months, however, to see the RBA act on their tightening bias, and we pencil in one additional hike in November.”

Westpac – Hold at 4.10%

Westpac senior economist Matthew Hassan said that recent economic data are unlikely to build a compelling case for a hike this month.

“We reaffirm our view that the current cash rate of 4.10% will be the peak of the 2022-23 tightening cycle and that the next move in rates will be lower with the first cut in the cycle coming in the September quarter of 2024,” he said.

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