Interest rates may not be cut next week when the Reserve Bank of Australia meets to discuss the cash rate. Many forecasters believe the RBA will leave rates on hold in March, then possibly cut again in April.
The RBA board meets on March 3 and it is widely tipped that the official rate will remain at it's 45-year low of 3.25 per cent.
The government stimulus packages, which included one off payments to eligible families and a boost to the First Homebuyer Grant would take time to be effective, the RBA said, but short and long term conditions looked strong. "Assessments of those medium-term prospects, as well as the course of the short-term data, would be important to future policy decisions.''
The RBA governor has commented that Australia has been more resilient than most industrialised economies, with its financial system remaining in relatively strong condition.
The official rate has been cut by 400 basis points since September last year. Now economists predict rates will remain in hold for March but may be cut by 50 basis points in April. How much of any future rate cut the banks pass on to homeowners is another questions all together.
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