The Reserve Bank of Australia`s Policy Board thinks an interest rate reduction might be necessary to help steer the nation`s economy away from a deeper economic slowdown.

Minutes of the RBA`s August 5 policy meeting, released Tuesday in Sydney, indicate the bank was poised to consider a drop from the current 12-year high cash rate of 7.5 percent.

`Indeed, less restrictive conditions could soon be called for, otherwise the risk of a deeper and more persistent slowing in the economy would increase,“ the minutes said. `On these considerations, a case could be made for an early reduction in the cash rate.`

The minutes showed committee members saw that `consumption spending had weakened considerably in 2008, with retail sales being essentially flat in value terms over the first half of the year.`

`On balance, it was now looking more likely that demand would remain on a slower track, and economic growth would be fairly slow, over the period ahead.`

The RBA Board`s next meeting is scheduled for September 2.


ForexGen.com is an online trading service provider supplying a unique and individualized service to Forex traders worldwide. We are dedicated to absolutely provide the best online trading services in the Forex market.

ForexGen provides a unique online trading experience based on our intelligent online Forex trading package, the ForexGen Trading Station, including the best online trading system.

ForexGen serves both private and institutional clients. We have a strong commitment to maintain a long term relationship with our clients.