Economists 'mixed on March interest rates'

Some economists in Australia believe that the Reserve Bank is likely to slash to base rate of interest once again when it meets in March, it has been reported.

According to the Australian Associated Press, it is likely that rates will be cut again as the recently announced $42 billion stimulus package will take time to take effect.

Aussies concerned about what this will mean for their savings interest rates may also be interested to hear that the minutes of the central bank’s last meeting – released today (February 17th) – reveal that this package will only have a “modest” effect on the economy in the near term.

Student loans could be boosted under the new package with a handout of $900, while farmers and low to middle-income earners are set to receive the same amount.

JP Morgan chief economist Stephen Walters stated that he expected the bank to cut interest rates by 50 basis points, while HSBC chief economist John Edwards believed the current rate of 3.25 per cent was low enough.

Meanwhile, Perth Now notes that the Bank appeared to be “shying away” from further interest cuts in its minutes.

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