Poll - How low with the Reserve Bank of Australia rate go in 2009?
Welcome back!
The Australian Bank Watch site has created a new webpoll to see where our visitors think the Reserve Bank of Australia’s interest rate will be at the end of 2009?
The RBA has acted swiftly in recent months in response to the growing global credit crisis and in October cut rates by a surprise 100 basis points.
The RBA followed suit again on Melbourne Cup day, the 4th November, delivering another 75 basis point cut to take the rate cut in the last two months to a massive 175 basis points.
This sizable cut reflects the genuine concern the RBA shares with regard to not only the health of the global economy but it’s effect on the domestic economy and domestic consumption.
Already unemployment has shown signs of rising, consumer spending has slumped, the AUD had been smashed and the the previously unstobbable commodity boom has slowed considerably.
The RBA have indicated a likelyhood of further cuts but are also tempered by inflation and any interest rate cuts will be impacted upon by the inflation rate that with be high on the Glenn Stevens mind come future rate cuts.
I am tipping an RBA rate of 3.75% by the end of 2009. It’s a bold prediction of 1.5% below current levels but I suspect this is where it will need to fall before it can stimulate the domestic economy.
What do you think? Take our poll and share your prediction or comments on the RBA rates outlook.
Comments
Leave a Reply