More interest rate cuts by the Reserve Bank of Australia (RBA) might have a “perverse” impact on the economy, Westpac’s chief executive Brian Hartzer said while speaking at his six-monthly grilling before a parliamentary committee, according to ABC.
Key quotes
Expectations that the Reserve Bank will cut rates close to zero was dampening rather than stimulating the economy.
The Reserve Bank’s latest quarterly update considered the negative perception of falling rates but cut anyway in October to dampen a rising Australian dollar.
The RBA has delivered three 25 basis point rate cuts this year. Currently, its interest rate stands at a record low of 0.75%.
Hartzer’s comments may bode well for the AUD. Currently, the AUD/USD pair is trading in the red near 0.6880.
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