RBA may hold again, but we are not in the clear: RMIT experts

Economics experts say while the Reserve Bank is tipped to hold interest rates again, there are many other factors putting immense pressure on the economy 

Bilgehan Karabay, Associate Professor, Economics 

Topics: RBA, interest rates, cost of living 

"Whichever decision the RBA makes today, there are many other factors at play denying us any reprieve from cost of living pressures.  

“If they choose to hold it again, it does not necessarily imply that we are at the end of the interest rate hike cycle. 

“The tight rental market means rental prices will continue to put pressure on inflation.   

“In addition, house prices seem to have plateaued, which is due to two effects that offset each other – on the one hand, high interest rates decrease loan applications and curb demand, on the other, high construction costs limit housing supply.  

“Markets see the possibility of another rate hike in the US until the end of this year. In addition, rates will stay higher for longer.  

“Other economies, including Australia, also face the same risk. The Australian dollar recently depreciated against the US dollar, which could create further inflationary pressures through our imports.” 

Associate Professor Bilgehan Karabay researches international trade, with a specific focus on the political economy of trade policy and international agreements. His research also covers the economics of information and uncertainty. Prior to starting his academic career, Bilgehan worked at the Central Bank of the Republic of Turkey as an economist.   

Ashton de Silva, Associate​ Professor, Economics

Topics: cost of living, housing crisis, housing market, Australian economy

Associate Professor Ashton de Silva is an industry-engaged academic who works across several areas, including the economics of local regions and households. He also applies his skills to explore how policies impact our society.