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Reserve Bank ready to cut rates if economy deteriorates
THE Reserve Bank of Australia trimmed its near-term growth and inflation forecasts today and said it has scope to cut interest rates if needed, just days after stunning markets by keeping its cash rate steady at 4.25 per cent instead of an expected cut. Forecasting core inflation to remain within its 2 per cent-3 per cent target band through 2012 and 2013, the bank painted a mixed outlook for a domestic economy that has been split between a red-hot resources boom while industries such as tourism and manufacturing suffer from a high exchange rate. The RBA noted that investment was continuing to pour into resources ... (full story)