RBA interest rates to stay on hold

The Reserve Bank of Australia (RBA) will refrain from cutting interest rates when it meets later today (June 2nd), despite warnings that the country has entered recession.

According to the Australian, financial analysts have predicted that there is just a 15 per cent chance of a 25 basis point cut, with the majority of experts expecting interest rates to remain at three per cent.

The paper anticipates that the RBA is unlikely to be influenced by statements from treasurer Wayne Swan in which he warned that official figures to be released later this week will show that Australia is in a recession.

A recession is generally defined as two consecutive quarters of economic decline and the official figures measuring economic performance will be published on Wednesday.

"The one thing we know for sure about our first-quarter GDP outcome is that without the government’s substantial economic stimulus the result would be much worse," said Mr Swan.

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