Just how low can Oz interest rates go?

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From the weekend AFR:

The Reserve Bank of Australia cut rates to a historic low of 2.25 per cent earlier this month,and analysts are tipping another cut to 2 per cent in coming months.

Queensland Investment Corporation chief economist Matthew Peter warned this weekthat should the United States central bank defer raising interest rates, the RBA could be forced to cut local rates to 1.25 per cent, which he predicted “would give a 15 per cent lift to housing prices”.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.