Australia’s central bank sets template for our rate cut

The Reserve Bank is set to cut the official cash rate to 2.0% next week at its Monetary Policy Statement. The Bank has laid the groundwork for a cut with its economic update a fortnight ago, which said that “it seems likely that further policy easing will be required”. The announcement of tighter LVR restrictions from the start of next month will also take some heat out of the housing market, albeit temporarily, thereby removing one of the key potential obstacles to a lower OCR.