Westpac: Soft Q2 CI provides space for RBA to maintain 4.35% interest rate

Westpac states that the Soft Second Quarter Consumer Price Index (CPI) provides space for the Reserve Bank of Australia (RBA) to maintain an interest rate of 4.35 per cent. Both Westpac and the Federal Bank (CBA) expect that the RBA will decide at its upcoming meeting to maintain interest rates, which it believes will give a positive signal to the Australian dollar ' s stability. Westpac noted that CPI was below expectations in the second quarter and that the transmission effect of energy costs had not been sustained in the near future, indicating a reduction in inflation risk. The two banks expect that, although interest rates remain unchanged, the RBA will maintain the hawk language to respond to future data changes。