RBA hoses down big rate cut expectations

The Reserve Bank is expected to cut interest rates on Melbourne Cup Day, the first Tuesday in November, but improving financial and economic conditions reducing market expectations in relation to further big rate cuts. Futures markets are now expecting no more than 0.5 per cent in official rate cuts by the central bank. The RBA governor Glenn Stevens said yesterday that he was confident the worst of the global financial crisis had passed. Mr Stevens said the Federal government's $10 billion fiscal stimulus package would cushion Australia from the global economic downturn. Mr Stevens said the big one per cent rate cut last month was bringing forward cuts that might normally have been made over several months.

Source: The Australian Financial Review