Economists react

Westpac chief economist

Bill Evans

For us by far the most significant aspect of the [RBA's] statement was the decision to move back to a neutral bias from the consistent easing bias that we have seen in recent statements.

Deutsche Bank chief economist Adam Boyton

The lack of any "forward guidance" in the final paragraph has us concluding the statement is a little less dovish than the market might have been expecting ... The case for the next rate cut - should there be one - needs to be built from scratch.

ANZ chief economist for Australia Ivan Colhoun

It's an evolution of recent thinking rather than a revolution. Therefore I think their statement on monetary policy on Friday will be very closely watched by the market because it will give more information about what they're thinking about the outlook for growth and perhaps the outlook for unemployment.

Barclays chief economist Kieran Davies

We are surprised that the RBA did not repeat the easing bias, as it would have placed some additional downward pressure on the exchange rate.

HSBC chief economist for Australia Paul Bloxham

We are of the view that today's cut could be the last for this easing phase, as the lower Australian dollar is doing a lot of the work for the RBA already and is also an upside risk to the inflation outlook.

UBS chief economist Scott Haslem

Firstly, there was no forward guidance. Little should be read into this, as it's relatively standard practice to provide minimal guidance on a cut, as was the case when they last cut in May ... We think the RBA is now on hold here for several months, being in data-watching mode.

RBS senior currency strategist Greg Gibbs

The risk is that [the Australian dollar] continues to squeeze up as the market unwinds the risk of further near-term cuts. The RBA is back in watch-and-wait mode. They would like to keep the Australian dollar low, but probably understand that cutting rates too quickly, [so] that it projects a bottom is close, will be counterproductive.