Recently, Australia’s top central banker said it was not “impractical” to anticipate a further decrease in interest rates given sufficient slack in the labor market, and called on the administration for measures on fiscal stimulus. RBA (Reserve Bank of Australia) Governor Philip Lowe reported it was “unrealistic” to believe that a single quarter-point curb in rates will be adequate on its own to accelerate economic growth. The RBA curbed rates to a record low level of 1.25% previously in this month. During an economics conference in Adelaide, Lowe said, “Given this, the odds of lower interest rates stay on the table. It is not impractical to anticipate a further lessening in the cash rate as the Board looks to wind back spare capability in the economy and present inflation results in line with the average-term target.”
The RBA is barely alone in easing, with the U.S. Fed (Federal Reserve) and the ECB (European Central Bank) in this week reversing route and opening the door to new spur. The futures markets entail around a 58% possibility of an RBA rate curb at its next summit, while a move to 1% by August is stated as a dead certainty. The further move to 0.75% is inclined by year-end. Lowe was frank in his evaluation of the requirement for stimulus.
Lately, RBA was in the news as the central bank plans to cut rates three times in 2019, according to economist says. A weakening financial system would force the RBA to reduce interest rates thrice this year to the unidentified territory of 0.75%, as per to a leading economist. Bill Evans—Westpac’s Senior Economist—said that he believed the central bank—facing anemic GDP (gross domestic product) growth, rising unemployment, and falling house prices—would go beyond that than earlier expected as it curbed rates from the old record low of 1.5%.