Pre-Christmas interest rate drop 'becoming more likely'

The ongoing eurozone crisis may force the Reserve Bank of Australia (RBA) to introduce further interest rate cuts before Christmas, it has been suggested.

Chief economist at AMP Capital Shane Oliver told the Sunday Telegraph there is a 60 per cent chance the RBA will sanction another reduction to rates in the next few weeks.

He stated the bank's committee will meet on December 6th to discuss the issue and another gathering is not scheduled until February, meaning action may have to be taken sooner rather than layer if the institution feels the European financial crisis will worsen heading into 2012.

"There's a 60 per cent chance they will, but I think 100 per cent they should. The risks are just too great," Mr Oliver was quoted as saying.

The RBA cut interest rates at the start of November and governor Glenn Stevens recently told the Australian Associated Press the move was "entirely appropriate".

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