Australia's first rate hike further off than most expect

The Reserve Bank of Australia (RBA) kept its policy rate on hold at 2.5% today and provided no surprises in its policy statement either. Once again it said that “the most prudent course is likely to be a period of stability in interest rates”, just as it has all year, all but ruling out a change in its policy rate over the next few months. In fact, we think policy rates will be left on hold for all of next year as well.