RBA could cut twice more

Friday 26 June 2009

Article by Mozo

Despite lopping an unprecedented 425 basis points off the base rate since September, the Reserve Bank of Australia (RBA) still has room to make at least two additional interest rate cuts.

Such is the conclusion of economics gurus 4Cast, although the group does concede that future interest rate cuts will likely be smaller than the kind of chops seen in the months following the collapse in financial markets last year.

"We think it’s going to be at least November now before there is enough accumulated evidence to shove the RBA off the fence," said 4Cast head of research Ray Attrill, speaking to the AAP.

He added that unemployment data will play a key role in swaying the RBA’s hand in the coming months.

Interest rates have been kept on hold at an even three per cent for the last two months, with the RBA deciding that there was no pressing need to make a cut earlier this month.

Get more information on the latest Reserve Bank interest rates with MozoADNFCR-1761-ID-19238879-ADNFCR

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