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Big rate cut expected in February |
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Monday, 02 February 2009 |
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When the board of the Reserve Bank of Australia meet tomorrow to discuss monetary policy experts are expecting a big cut to the official cash rate.
Analysts from Westpac are tipping a one percent rate cut. Senior Strategist with TD Securities, Joshua Williamson, also would not be surprised to see a one percent reduction. "The Reserve Bank will be squarely focused on the fact that the global economy is deteriorating," he said. The International Monetary Fund recently stated in their World Economic Outlook report that the global economy would grow by just 0.5 percent this year. They said that many of the worlds largest economies would achieve a negative growth figure and warned that the financial crisis could intensify if governments don’t take appropriate steps mediate its affects. Recently we recorded the biggest quarterly decline in domestic inflation in the last 10 years. The Australian Bureau of Statistics revealed that the Consumer Price Index fell by 0.3% in the December quarter. That makes annualised inflation of 3.7% compared to 5% for the previous quarter. This is the largest quarterly decline since 1997. |
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