Economists are anticipating the Reserve Bank will cut interest rates dramatically next week, following signs that inflation pressures are easing.
It s expected the RBA will cut the official cash rate by 1 percentage point, to a record low of 3.25%. There is also speculation the rate will drop further in the coming months, to 2.5% by midyear.
In other related news:
- businesses are taking around 56 days to pay bills, a sign of cash-flow problems associated with a lack of access to credit
- the IMF has issued its gloomiest forecast yet, with expectations of the global economy growing just 0.5% this year
- over the ditch, New Zealand s central bank has cut its official interest rates by 1.5 percentage points, to a record low of 3.5%