After the Reserve Bank Board meeting last 3rd February that resulted in the decision of cutting the cash rate into a record low of 2.25 per cent, there is a clear bias to cut rates again.
What does this mean?
The Reserve Bank has made a strategic decision and is conserving its ammunition. Rates may be cut again if the economy needs a bit more help. However, there is no urgency, no panic. This decision can be applauded as the statement is short, sharp and to the point. Consumers won’t have to be alarmed by successive cash rate cuts. But rates are still low, and can fall further. So the decision is positive for confidence and hopefully causes more consumers and businesses to spend, invest and employ.