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ISCOVER
Staff Reporter
1300HomeLoan managing director John Kolenda has called on the Reserve Bank to cut the official cash rate in both February and March.
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Mr Kolenda said it was now essential for the Reserve Bank to keep cutting rates beyond February in a bid to deliver real relief to homeowners.
"Economists are speculating that this month will be the last cut until mid-year but if that happens it will be a disaster because the banks have made it pretty clear that they intend to largely absorb the February cut to offset their higher funding costs," he said.
A majority of economists expect that the RBA will cut interest rates when the board meets for the first time this year on February 7, probably by 0.25 per cent to 4.0 per cent.
Banks have already trimmed rates by 0.25 per cent in both November and December but consumer spending and the housing market remain weak.
Mr Kolenda said that that with inflation running at lower than expected levels and the world economy still weakening it was vital to put money into homeowner's pockets as soon as possible.
"There are still too many downside risks to the Australian economy right now so we really need to ensure that adequate relief is passed on to borrowers," Mr Kolenda said.
