The visible hand in economics

RBA cuts 100

Posted on: December 3, 2008

The Reserve Bank of Australia cut 100 basis points last night taking the cash rate to 4.25% – well into easing territory.

A feeling that global commodity prices were in for a sustained lower period was a driving force behind this stimulus.  Surprisingly the Reserve Bank of Australia did not mention to enormous decline in fuel prices – however, there suggestion that the terms of trade would fall markedly implicitly suggests that the decline in petrol prices will be dominated by other factors.

What does this mean for New Zealand – a rule of thumb stemming from cuts so far (Aussie cut + 25) would suggest 125bp.  100 is still conceivable, as is 150.  My pick of 75 now seems incredibly unlikely.  Note, further discussion of the decision occurs in the comments of this post🙂

Copyright tvhe.wordpress.com ©

3 Responses to "RBA cuts 100"

[…] for me so the Bank is yet to announce it. We have discussed this wildly though (here, here, and here) – so it will be good to see what has […]

Hey, you used to write great, but the last several posts have been kinda boring… I miss your super writings. Past few posts are just a little bit out of track! come on!

Hey not to go off topic but can anyone give me overview of. New York Car Insurance Reform 295 Greenwich St, New York, NY 10007 (646) 351-0824 They’re just down the block from me. I was wondering if they were a good insurance agency. I need to acquire coverage, it is regulations you know, but I have to have a good price price plus I want friendly service.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Add to Google
%d bloggers like this: