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Rate cut expected after weak inflation

The Reserve Bank of Australia is all but certain to cut rates in May, with new CPI data weaker than expected.  CPI rose by 0.1 per cent in the March quarter of 2012.

The Housing Industry Association said the CPI result was weak enough to warrant a 50 basis point rate cut at next week’s Board meeting. The wider Australian economy needs a further 75 basis points of interest rate cuts and there is nothing standing in the way of a 50 basis point move to get the ball rolling next Tuesday.
50 points would be a bold move for the RBA, but it would be entirely appropriate given the pulse of the Australian economy.