Economists are increasingly predicting the Reserve Bank of Australia will slash the nation's official cash rate tomorrow in a bid to stimulate the economy.
Despite the RBA already making two cuts to interest rates this year – which currently stand at 0.25 per cent – experts believe the central bank will go further.
Most believe the RBA will drop the cash rate by 15 basis points to 0.10 per cent, marking the lowest official cash rate in Australian history.
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Despite this, Insights Manager at Finder Graham Cooke believes further cuts will not make dramatic changes to the finances of ordinary Australians.
"The cash rate has already dropped 125 basis points in the last two years, so a further 10-15 point cut is unlikely to have much of an impact on the economy," Mr Cooke said.
"However, our experts seem to think that the RBA is in 'every little bit helps' mode.
"The Reserve Bank said earlier in the year that it was considering 0.25 per cent as an effective rock-bottom, so a cut of any sort is a reflection of the grim economic situation."
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But Australia's economic woes as a result of the COVID-19 pandemic seem to be turning already.
A speech by RBA Deputy Governor Guy Debelle in late October hinted that Australia's recession may already be over.
"It looks like in the quarter the country probably recorded positive growth rather than negative," Mr Debelle said.
"Possibly the drag from Victoria was a little less than what we'd guessed back in August."
Peter Boehm of trading giant CLSA Premium said we may even be overdue for another interest rate cut, if it weren't for the delayed Federal Budget last month.
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"Interest rates were kept on hold last month largely due to the timing of the Federal Budget," Mr Boehm said.
"Now that this has been announced, and states are showing reasonable signs of economic recovery (other than Victoria), further easing of monetary policy will likely be supported by the RBA."
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