The RBA should have held fire

The central bank's decision to cut rates today shows how worried it is, but it was premature because it's too soon to measure the impact of the last rate cut and the Greek elections could be another eurozone flashpoint.

The Reserve Bank could easily have sat on its hands for a while longer and waited to see how the crisis within the eurozone and the slowing of China’s economy plays out before following up last month’s 50 basis point cut to the cash rate. The fact that it didn’t signals its concern about the conditions both offshore and within the domestic economy.

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