 March interest rate predictions
When the Reserve Bank of Australia meets in March the general feeling is there will be no cut to official interest rates.
The central bank has cut rates by 400 basis points since September, down to 3.25% and many economists believe the rate will stay on hold until April.
Monetary policy seems to be working, albeit slowly, to stimulate the economy and therefore the RBA may sit and wait until April to make any more cuts to the cash rate.
St George Bank chief economist Besa Deda said rates were likely to fall to a record low of 2.25 per cent by mid-2009.
"We continue to look for more RBA rate cuts in coming months, but believe that the size of the cuts will be smaller and there may be some pauses between meetings," St George's Ms Deda said.
"RBA governor Stevens indicated that the central bank will ease rates again if needed.
"Australia cannot remain immune to the severe synchronised downturn in the world economy, but RBA stimulus is needed to help cushion the slowdown underway in the Australian economy."
RBA governor Glenn Stevens told a House of Representatives Economics Committee hearing in Canberra that he has not ruled out further cuts to interest rates is needed. But he has ruled out going as low as zero saying it is not necessary.
Australia's cash interest rate of 3.25 per cent is one of the higher such rates in the advanced world, even though it is at its lowest point since 1964. Both the UK and America now has a cash rate of just 1 per cent.
Mr Stevens said interest rate cuts in Australia had been more effective than in other countries with extremely low interest rates because the transmission system was working more effectively.
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