No more big rate cuts

The Reserve Bank governor has signalled that the central bank may wait and see the impact of recent rate cuts before making any new big rate cuts.

Financial markets have priced in a 91 per cent chance of a 0.5 per cent rate cut to 2.75 per cent next month but increasing numbers of economists are expecting the Reserve Bank to leave the official cash rate unchanged in March.

The odds on financial markets of a 0.75 per cent rate cut has fallen from 95 per cent to 20 per cent in last three weeks.

The governor of the RBA, Glenn Stevens, told a parliamentary committee that interest rates were very low by historical standards.

Source: The Australian Financial Review