No need for more rate cuts: Shadow RBA »

There are clear signs the weaker dollar is helping the domestic economy. However, the danger is that Australia is becoming embroiled in the global currency war. The Reserve Bank of Australia (RBA) doesn't need to cut interest rates further after it lowered the official cash rate in February, and might need to start increasing rates in six to 12 months, the ANU RBA Shadow Board has found. The RBA lowered the cash rate from 2.5 per cent to 2.25 per cent in February and financial markets are anticipating another possible cut over the coming months. The RBA Board will hold its March policy meeting on Tuesday. RBA Shadow Board chair Dr Timo Henckel said on balance, the RBA Shadow Board believes 2.25 percent to be the appropriate setting. "The RBA Shadow Board on balance prefers to hold rates and still considers it necessary that the cash rate is lifted in six to 12 months," said Dr Henckel, from the ANU Centre for Applied Macroeconomic Analysis (CAMA).