Does the Melbourne Cup make an RBA rate change more likely?
Will the Reserve Bank try to sneakily announce a rate rise during the nation's biggest racing event? Here's what we know.
The Reserve Bank of Australia (RBA) makes its regular announcements about the official cash rate at 2:30pm on a Tuesday.
Until 2024, this happened every month. The Melbourne Cup, Australia's biggest horse race, always happens on the first Tuesday of November at 3pm, so a rate change has been possible every single Cup day.
This year, the RBA switched to rate announcements 8 times a year - but one of those dates, 5 November 2024, still coincides with the Melbourne Cup. But does that make a rate rise more likely?
The cynical view is that any rate rise will indeed be announced to coincide with the Melbourne Cup, because everyone's less likely to notice, what with all the booze and horses.
However, history does not bear this out.
Here's the full list of the 13 times that we've actually seen a rate change on Cup day during the modern RBA era (since 1990), and what happened:
| Date | Change |
|---|---|
| 7 Nov 2023 | Increased 0.25 to 4.35% |
| 2 Nov 2022 | Increased 0.25 to 2.85% |
| 4 Nov 2020 | Cut -0.15 to 0.1% |
| 2 Nov 2011 | Cut -0.25 to 4.5% |
| 3 Nov 2010 | Increased 0.25 to 4.75% |
| 4 Nov 2009 | Increased 0.25 to 3.5% |
| 5 Nov 2008 | Cut -0.75 to 5.25% |
| 7 Nov 2007 | Increased 0.25 to 6.75% |
| 8 Nov 2006 | Increased 0.25 to 6.25% |
| 5 Nov 2003 | Increased 0.25 to 5% |
| 3 Nov 1999 | Increased 0.25 to 5% |
| 6 Nov 1996 | Cut -0.5 to 6.5% |
| 6 Nov 1991 | Cut -1 to 8.5% |
With 13 rate changes out of a possible 34 in November between 1990 and 2023, the odds of a rate change sit at a little over 1 in 3. In those 13, 8 were increases and 5 were cuts - so slightly more chance of a rise, but not massively so, and no change is still more likely.
That figure is somewhat skewed by the 6-year continuous run of Melbourne Cup Day rate changes between 2006 and 2011.
That's what's initially likely to have created a perception that "Cup day" = "rate change", but it's not the long-term trend.
We saw the rate increase on Melbourne Cup Day in November last year, so folks with short memories might see this as a regular occurrence.
But it depends what year you consider. The base rate has stayed at 4.35% since the last Melbourne Cup, and that seems likely to continue.
Conversely, in 2022, when the rate also rose on Cup Day, it was the seventh monthly rise in a row, and it was followed by another 3. The Cup wasn't a factor at all.
Finder's RBA survey has every economist predicting a hold for November 2024.
Ultimately, the RBA decision is driven by a complex set of market forces and policy approaches, but the fact a horse race happens to coincide with it once a year is not one of those forces.
So don't place any bets on the RBA making a rise (or even a cut) just because it's Cup day. The odds will not be ever in your favour.
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We updated this guide in November 2024 to include expert predictions on the 2024 decision.
Image: @Tourism Australia via Canva.com