RBA 'unlikely to reduce the cash rates further in December'

The Reserve Bank of Australia (RBA) is unlikely to announce another reduction to the cash rate when it meets next month, an expert has asserted.

Dr Shane Oliver, chief economist at AMP Capital Investors, asserted that the downward revisions to economic growth forecasts suggest the central bank is likely to adopt "a more dovish stance", reports the Australian Associated Press.

"There's nothing that suggests a sense of urgency. There's a good chance the Reserve Bank will sit pat at its December meeting," he commented.

However, he suggested that the recently revised inflation forecasts suggest that there is scope for further interest rate cuts in the coming months.

The expert claimed that while it is unlikely the RBA will announce its second rate cut of 2011 in December, there could be a change to the cash rate in February or March 2012.

When it announced the cut last month, the central bank observed that a "neutral stance" on monetary policy is the most appropriate for "achieving sustainable growth".

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