AUSTRALIAN CASH AND BANK BILL SWAP RATES

The current Reserve Bank of Australia cash rate remains at 1.5%. Bank bill swap rates are as follows:

30 day

60 day

90 day

180 day

BBSW

1.56%

1.56%

1.56%

1.55%

The official cash rate has remained unchanged since August 2016. In its May cash rate decision, the RBA stated that a further improvement in the labour market was needed for inflation to be consistent with the 2% -3% target band. This has not been the case as demonstrated by the unemployment and underlying inflation figures. The national unemployment rate has now risen from an eight-year low of 4.9% in February to 5.2% in April 2019. Underlying inflation fell from 1.8% in December 2018 to 1.3% in March 2019, which is close to the decades-low figure of 1% in June 2016. As a result, the RBA has indicated the cash rate is likely to be cut next month. The expectations of the major banks are for a 25 basis points reduction in June to 1.25%, with a further reduction of 25 basis points predicted in August 2019. This would see the official cash rate drop to 1%.

See important disclaimers.