| INTEREST RATES SET FOR STEADY DECLINE |
There are growing predictions that the Reserve Bank of Australia (RBA) will reduce official interest rates by 0.5 percent when it meets next Tuesday, 2 September.
(The Ledge Finance website will publish the Reserve’s decision immediately it is released at 12.30pm WST).
It is widely agreed that the central bank’s recent commentary on Australia’s slowing economy has guaranteed a rate cut of at least 0.25 percent … while an increasing number of commentators are tipping double that figure.
Westpac’s latest analysis predicts a total 1.0 percent reduction in rates by early next year - starting with 0.5 percent in September. It then expects a pause before the Reserve makes further cuts in late 2009/early 2010 to bring official interest rates down to 5.5 percent (currently 7.25 percent).
Westpac predicts the Australian dollar will fall in the near term before rising through US 90 cents by December to US 95 cents by June next year, then easing back a couple of cents by the end of 2009.