Rates to fall to five per cent
The Reserve Bank governor Glenn Stevens said he was not establishing a pattern for future rate cuts with the unexpected move yesterday to slash the official cash rate by 1 full percentage point. The rate cut was the single biggest cut in rates by the central bank since 1992. Analysts said the RBA was signalling that they would do whatever is necessary to keep Australia out of a recession. The move is also expected to help the banks with funding pressures as they have kept 0.2 per cent of the rate cuts, whilst still delivering big rate cuts to borrowers. The Australian Stock market rebounded after big falls in the morning to climb two per cent higher in the minutes after the RBA announcement at 2.30 pm yesterday.
Source: The Australian