Rates to fall to 2 per cent by christmas

The Reserve Bank governor Glenn Stevens hinted strongly yesterday that the central bank would be cutting rates again this year, although possibly not in June. Markets have priced the chances of a 0.25 per cent rate cut in June at 22 per cent.

Westpac chief economist Bill Evans said the minutes of the May RBA board meeting which were released yesterday indicate that the central bank is likely to cut official rates to two per cent by the end of 2009.

Source: The Australian Financial Review