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RBA rate tipped to hold amid Victoria struggles

The Reserve Bank is almost certain to leave the cash rate at a record low when its board meets amid desperate times in coronavirus-stricken Victoria.

Economists expect the central bank will keep the cash rate at 0.25 per cent on Tuesday, as the economy is further challenged by the start of a six-week hard lockdown in Melbourne.

A night curfew, 5km travel limit and most retailers being ordered to shut will devastate business and workers in Australia’s second-biggest city.

Weekly consumer confidence survey results are also expected on Tuesday from the ANZ and Roy Morgan.

The index has fallen for five straight weeks as new virus cases in Victoria climbed and NSW tried to control small scale outbreaks around the state, mostly in Sydney.

Retail trade figures for the June quarter are expected, and economists believe these will show a decline of 1.5 per cent.

Westpac economists expect an even weaker result, a drop of 3.2 per cent, which would be the biggest decline since the introduction of the GST 20 years ago.

The ASX closed marginally lower on Monday after investors sold off the big banks, the day after Melbourne’s tough new social distancing rules were announced.

The S&P/ASX200 index closed lower by 1.7 points, or 0.03 per cent, at 5926.1 points, while the all ordinaries index closed lower by 4.4 points, or 0.07 per cent, at 6053.9.

AAP

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