Treasurer urges banks to mirror RBA rate cuts

Should the Reserve Bank of Australia (RBA) opt to cut interest rates at its next meeting on Tuesday (November 1st), banks in the country should follow suit, treasurer Wayne Swan has stated.

In an interview with ABC radio, he asserted that the latest statements from the central bank indicate that a reduction is a possibility.

The cash rate has not been cut for two-and-a-half years, but many economists have suggested that a reduction is impending.

Mr Swan would not make a prediction about the forthcoming decision of the RBA, but commented: "There's certainly no excuse for the banks not moving down if the Reserve Bank was to cut rates."

Shadow treasurer Joe Hockey recently called on the RBA to reduce interest rates this coming Tuesday, saying that this could help to stimulate the economy.

In support of the suggestion, he cited the International Monetary Fund, which suggested that countries need to bring their budget deficits under control.

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