The central bank may maintain the low-interest rate environment until 2020.

The consensus among those following the industry is that the Reserve Bank of Australia (RBA) will hold the official interest rate at 1.5% until next year but that a rate rise is coming. Of those predicting a hike, many are changing their tones and pushing back their interest hike predictions.

Macquarie Bank is one of those onlookers. In a report for the Business Insider Australia, Macquarie said the central bank would not raise interest rates until early 2020 – a far cry from their earlier projections of an August 2018 rate hike.

For Macquarie, this is due to the pace of Australian economy growth. The bank said while the economy is gradually growing, it has not been fast enough.

For instance, the unemployment rate is still at 5.5%, with income growth hovering a little above 2%.

"[W]e are now of the view that prolonged monetary support will be necessary as the economy continues to adjust to a post-commodity boom world," it said.

As such Macquarie believes it will take years for a significant progress to be made.

There’s a chance, though, that the rate rises earlier, particularly in the event of a faster-than-expected decline in unemployment.

“The chances of a later rate hike, or no rate hike, would rise if China’s deleveraging or domestic housing market developments become disorderly, or if by 2020 the US economy slows much faster than we expect," Macquarie said.

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