Don't bank on RBA rate cut

A number of experts are betting that the Reserve Bank of Australia (RBA) will avoid making any further interest rate cuts.

The Sydney Morning Herald reports that NAB and Westpac are now officially expecting the RBA to hold off on cuts, while ANZ is expecting another 50 basis point cut and CBA a 25 point reduction.

"There is still room for the RBA to cut but it looks like it won’t need to," commented NAB Capital chief economist Rob Henderson.

Meanwhile, the paper points out that even if the RBA does move ahead with another cut, it is looking unlikely that the banks will pass it on in new low-interest home loans because of their high funding costs.

The RBA decided to on hold once more this month, keeping the cash rate at its 59-year low of three per cent.

Since making four consecutive cuts at the end of last year, the RBA has made only two further reductions in 2009.

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