In an article by a staff reporter from The Adviser it was reported The Reserve Bank could cut the official cash rate again as early as next month, one leading economist has claimed.

AMP’s chief economist Shane Oliver said the Reserve Bank will have to cut the cash rate to at least 2.5 per cent over the coming six months in a bid to stimulate the economy.

Mr Oliver believes the next cash rate will happen next month as the Board looks to enhance demand for non-mining related products and address Australia’s low inflation. “Our assessment remains that the RBA has more work to do. The need to boost the non-mining sectors of the economy as the mining boom fades at a time when the Australian dollar remains strong and fiscal cutbacks are intensifying means the RBA will have to cut interest rates further. Post GFC caution has likely resulted in a reduction in a neutral level for bank lending rate, such that they are only just now starting to become stimulatory,” he said.  

 John Whitten can be contacted on 0749722081 or 0410433919. You can also email him at jwhitten@ihl.net.au or look him up on the net www.ihl.net.au. John Whitten is a credit representative (CRN 399796) of BLASSA Pty Ltd (Australian Credit Licence No 391237).