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Interest rates set to fall to 2.75 percent

Discussion in 'The Economy' started by Tropo, 9th Dec, 2008.

  1. Tropo

    Tropo Well-Known Member

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    Interest rates set to fall to 2.75 percent

    The Reserve Bank will slash a further 1.5 percent off interest rates and the cash rate will fall to 2.75 percent by the middle of next year, according to a leading economist.
    Bill Evans, chief economist at Westpac, said that with the world economy “deeply in recession”, and a high chance that US interest rates will be cut to zero, more Reserve Bank rate cuts are inevitable.

    More .... Interest rates set to fall to 2.75 percent
     
  2. Chris C

    Chris C Well-Known Member

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    Sounds about right.

    It will be interesting to see just how much all these rate cuts stimulate the economy, because there is still a lot of debate as to just how much of these government handouts and rates cuts will translate in increased consumption as opposed to increased consumer saving and paying down debt.
     
  3. crc_error

    crc_error The Rule of 72

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    I'm paying down debt!

    would it be a good time to fix if rates are 0%?
     
  4. Chris C

    Chris C Well-Known Member

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    I don't think it will be an issue, the world finance system will have collapsed before the RBA is required to cut rates to 0 - 1%.

    A good chunk of the rest of the developed world's central banks already have interest rates in the 1 - 3% range, and I think it is a reasonably safe bet they are still headed south of those figures. Plus the two biggest economies in the world US and Japan have rates below 1%,

    I don't know what happens when the majority of the developed world moves their interest rates to 0 - 1%... free money for all?

    My guess is it won't be like anything anyone has seen in recent history.
     
  5. Billv

    Billv Getting there

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    The banks will never offer such a rate
    The best we can hope for would be around 3-4% for a 5 year term?