RBA shadow board says hold

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The RBA shadow board has called for a hold tomorrow:

“Apart from attempting to accommodate fiscal negligence and the uncertainty about the nature of policies generally after the September election, in the near term the major issue is whether foreign investors will continue to want to hold $A assets and therefore keep the exchange rate a high level,” Professor McKibbin said.

“A loss of foreign investor appetite will cause a sharp exchange rate correction which, while good for some sectors of the economy, would raise imported inflation and push the inflation rate well above the target band especially given the currently high rate of non-­traded goods inflation.”

Bloxo said rates were working and bob Gregory was split evenly between hold and cut.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.