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April 1st, 2013 
Peter Nolan
Updated
The Reserve Bank is expected to leave interest rates unchanged at 3 per cent when it holds its monthly board meeting today.
Economists are unanimous in their belief that the cash rate will remain unchanged at the historically low level, which was set in December.
But BT Financial Group chief economist Chris Caton says rates could be cut again by the end of the year.
“It’s now at the stage where it’s anybody’s guess. My suspicion is there may still be one more rate cut out there,” he said.
Mr Caton also says the Cypriot banking crisis and its subsequent impact on global financial markets is unlikely to influence the bank’s decision.
“Something much bigger would have to happen in Europe before we cut rates again because of the deteriorating global environment, which is what you could say we did late last year,” he said.
“But no, the global environment right now would have to deteriorate to bring on another rate cut in Australia.”
A senior economist at UBS, George Tharenou, says better economic conditions mean interest rates will not need to fall any further.
“We do think as the year progresses, we will see some moderate improvement in the domestic economy and that will allow them to keep interest rates on hold,” he said.
But Mr Tharenou says the quickest route to another rate cut will be through higher unemployment.
“If there was to be a spike in the unemployment rate, that would pressure the RBA again to start cutting, but for now, there are enough signs of a turning point in the economy to suggest the stabilisation of the labour market will continue,” he said.
Topics:
business-economics-and-finance,
money-and-monetary-policy,
australia
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Source Article from http://www.abc.net.au/news/2013-04-02/rates-tipped-to-stay-on-hold/4604240
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