National Australia Bank lowers peak rate call for Australia to 3.85%, from 4.1%

SYDNEY (Reuters) – National Australia Bank said on Thursday it expects Australian interest rates to peak at 3.85%, down from a previous estimate of 4.1%.

NAB added it still expects the Reserve Bank of Australia to raise its official cash rate by 25 basis points in April for a final time, beginning rate cuts in the first half of 2024.

“We continue to see rate cuts in H1 2024 bringing the cash rate back to 3.1% as the economy slows and unemployment rises,” the banks chief economist Alan Oster said in a statement.

Fellow Australian bank Westpac also cut its peak rate forecast to 3.85% earlier this month.

(Reporting by Stella Qiu in Sydney; Editing by Alasdair Pal)