Australia's major bank rules out odds of rate cut in 2024

SYDNEY, June 11 (Xinhua) -- One of Australia's four major banks has ruled out the possibility that the country's Reserve Bank would cut its cash rate target this year.

"Since November 2022, we have expected that the first cash rate cut in Australia this cycle would be in November 2024. More recently, however, we have been cautioning that the risks around that view were skewed to a later start to the easing cycle," Adam Boyton, head of Australian economics at Australia and New Zealand Banking Group, said on Tuesday.

The latest data from the Australian Bureau of Statistics showed that the country's Consumer Price Index (CPI) rose 1.0 percent in the March quarter, higher than the 0.6 percent increase in the December quarter of last year.

The stronger-than-expected CPI in the first quarter, according to Boyton's analysis, made it hard to see the central bank "being sufficiently confident that inflation will return to and stay in the band by the time the November meeting comes around."

"We now expect the first cash rate cut in February 2025 (from November 2024). We expect a follow-up easing shortly thereafter, most likely in April, although May is possible," Boyton told local media.

Australia's cash rate target has stayed steady at 4.35 percent following the central bank's four board meetings in a row.

The Reserve Bank of Australia expected inflation to return to the target range of 2-3 percent in the second half of 2025 and reach the midpoint in 2026, while the CPI rose 3.6 percent over the 12 months to the March 2024 quarter.