Westpac calls for interest rate reduction by the RBA

The Reserve Bank of Australia (RBA) has been urged to reduce the cash rate by Westpac's chief economist Bill Evans.

In a report set to be released today, he asserted that the case for taking this step is "now strong", citing the latest Westpac-Australian Chamber of Commerce and Industry survey as evidence of this.

Its composite index fell by 1.2 points in the September quarter, dropping to 47.7 points and remaining below the 50-point level for separating economic expansion from contraction, reports the Sydney Morning Herald.

Mr Evans stated: "It is time for the authorities to ease financial conditions."

Huw McKay, senior economist at Westpac, added that now is the time for the RBA to act on the flexibility hinted at in its latest set of minutes.

While Westpac is calling for a cut in the cash rate, the National Australia Bank's most recent forecast suggested that rates are likely to remain stable until November 2012.

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