The RBA's bank beacon

Reserve Bank Governor Glenn Stevens gave a clear signal to the market and the banks today, that if the economy continues to show weak growth and low inflation a rate cut is on the cards.

There was unanimity in the market ahead of today’s Reserve Bank board meeting that there would be no change to official interest rates. The market was right, but there may not have been quite the same unanimity within the boardroom.

Going into the meeting it was probable that rates would be left unchanged, but not certain. One only has to read Glenn Stevens' statement after the meeting to understand why a change was possible.


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