Westpac expects monetary easing by Australia central bank in October

FILE PHOTO: A woman exits the ground floor of an office building with Westpac logo amidst the easing of the coronavirus disease (COVID-19) restrictions in the Central Business District of Sydney, Australia, June 3, 2020. Picture taken June 3, 2020. REUTERS/Loren Elliott

SYDNEY (Reuters) - Westpac WBC.AX economist Bill Evans said on Wednesday he now expects Australia's central bank to cut the cash rate and the three-year bond yield target to 10 basis points at its Oct.6 board meeting.

“This will be a Team Australia event preceding the Federal Budget announcement later that day,” Evans said, adding the prospect of the Reserve Bank of Australia (RBA) sitting back to assess the budget was not appropriate during these “unique times.”

The three-year bond yield and cash rate are currently at 0.25% each.

The change in view follows a speech by RBA Deputy Governor Guy Debelle where he signalled the likelihood of more monetary easing.

The RBA had last slashed interest rates to a record low 0.25% in an emergency meeting in mid-March to backstop the economy from the coronavirus crisis.

(This story refiles to correct day of week in first paragraph to Wednesday)

Reporting by Swati Pandey; Editing by Shri Navaratnam