Moreover, a look at recent gross domestic product (GDP) data "reveal a lack of sustainability," BTIM continued. While the country's 2015 report card revealed a 3 percent expansion for 2015, beating RBA expectations, that trend won't continue for much longer, BTIM noted, warning of lower iron ore exports in the future.
Central banks such as the European Central Bank, the Bank of Japan (BOJ) and Riksbank have all introduced negative rates during periods of tepid consumer price growth in an effort kick start their respective economies. But many strategists have questioned their efficacy and warned of dangers underlining the move, including the risk of consumers withdrawing money from banks to store at home instead of spending the cash.
"The question is will they [the RBA] be successful?" echoed BTIM.
The firm pointed to market reactions to recent BOJ meetings as proof of the doubts behind negative rates. The BOJ implemented negative rates at the end of January, a move that should have caused the yen to depreciate but instead, the currency has rallied in the months following the decision.
"The theory says yes, but in practice it's unclear as RBA monetary policy has no influence over commodity prices or overcapacity in Chinese and Japanese markets. This takes us back to the question of central bank credibility in being able to deliver on their objectives."
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