4 Jun 2013

June rate cut unlikely by RBA

12:37 pm on 4 June 2013

The Reserve Bank of Australia is unlikely to cut the cash rate on Tuesday and the falling Australian dollar is a big factor in the decision.

All but one of the 13 economists surveyed by AAP expect the Reserve Bank of Australia to hold its cash rate steady on Tuesday. However, most say another rate cut is on the cards later in the year.

AAP reports the RBA cut the cash rate by quarter of a point to a record low of 2.75% at its previous board meeting on 7 May.

HSBC chief economist Paul Bloxham said the high Australian dollar was one of the factors the RBA moved then.

"Had the Australian dollar been at its current level when the RBA met last month, we suspect it may not have cut rates," he said.

"For this reason, we expect the RBA to remain on hold."