RBA expected to hold rates

AAP

Borrowers are unlikely to get another interest rate cut on Tuesday, partly because the central bank is getting its wish - a falling Australian dollar.

All but one of the 13 economists surveyed by AAP expect the Reserve Bank of Australia to hold its cash rate steady on June 4.

However, most say another rate cut is on the cards later in the year.

At its previous board meeting on May 7, the RBA cut the cash rate by quarter of a percentage point to a record low of 2.75 per cent.

While Australia has been enjoying the benefits of a mining investment boom, growth in the rest of the economy has struggled because of the high Australian dollar.

The currency has stayed above parity with the US dollar for most of the past two years but in May fell more than seven per cent.

HSBC chief economist Paul Bloxham said the high Australian dollar was one of the factors the RBA moved on May 7.

"Had the Australian dollar been at its current level when the RBA met last month, we suspect it may not have cut rates," he said.

"For this reason, we expect the RBA to remain on hold next week."

More from Business Spectator