Prediction of rate reduction later this year

A leading economist believes the Reserve Bank will make another rate reduction later this year.

AAP

The Reserve Bank has left the official cash rate unchanged at a record low of 2.25 per cent.

 

The RBA Governor Glenn Stevens says the economy is still growing at a below trend pace, there's rising unemployment and the Australian dollar is still too high.

 

But he believes it's appropriate to hold the cash rate steady for the time being after last month's interest rate cut.

 

Saul Eslake is the chief economist at Bank of America Merrill Lynch Australia.

 

He told Greg Dyett the Reserve Bank's statement points to another rate reduction later this year.