Westpac expects monetary easing by Australia central bank in October

SYDNEY (Reuters) – Westpac economist Bill Evans said on Wednesday he now expects Australia’s central bank to cut the cash rate and the three-year bond yield target to 10 basis points at its Oct.6 board meeting.

“This will be a Team Australia event preceding the Federal Budget announcement later that day,” Evans said, adding the prospect of the Reserve Bank of Australia (RBA) sitting back to assess the budget was not appropriate during these “unique times.”

The three-year bond yield and cash rate are currently at 0.25% each.

The change in view follows a speech by RBA Deputy Governor Guy Debelle where he signalled the likelihood of more monetary easing.

The RBA had last slashed interest rates to a record low 0.25% in an emergency meeting in mid-March to backstop the economy from the coronavirus crisis.

(Reporting by Swati Pandey; Editing by Shri Navaratnam)