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ISCOVER
Staff reporter
While the Reserve Bank thought it was prudent to leave the official cash rate on hold in November, one economist believes the Board could start cutting rates again as early as next month.
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Last week, RBA governor Glenn Stevens said the impact of previous rate cuts was yet to be felt, as such, it seemed the current cash rate setting was and is appropriate.
"With prices data slightly higher than expected and recent information on the world economy slightly more positive, the Board judged that the stance of monetary policy was appropriate for the time being," Mr Stevens said.
Despite Mr Stevens' comments, BT's chief economist Chris Caton said there was still room for the RBA to cut rates one more time before the end of the year.
Speaking at the Bernie Lewis advice conference in Noosa last week, Mr Caton said he would not be surprised to see the cash rate fall to the historic low of 3 per cent in December.
"I still believe there are more rate cuts in play and one will happen in December," he said.
"I truly believe interest rates have not yet stopped falling - but we have most of the decline behind us.
"The Reserve Bank is back in cutting mode because it knows the mining boom won't last. It also knows the labour market is struggling."
