The Distillery: RBA’s rubber scissors

Jotters broadly agree that rate cuts don’t pack the same punch they used to, with one saying poor policy has left the Reserve to pick up the slack.

The Reserve Bank of Australia has reduced interest rates to record lows for borrowers (any deposits, by the way?). The reason for its decision is that inflation is in check… and the economy is sliding into mediocrity. This morning, Australia’s business commentators reflect on the position of the Reserve Bank’s cash rate and where in the hell we could go from here.

Fairfax’s Malcolm Maiden observes that since interest rates began falling from 4.75 per cent in November 2011, the average variable home loan, small business and deposit rates have slid significantly and will fall further.

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