Just how far will the Federal Reserve Bank go in lowering interest rates to save the country from a long and painful recession?
The Government has promised to do everything in its power to create the environment necessary to support growth and jobs.
Official interest rates have dropped by 2 percentage points to 5.25 per cent in the past three months, but the general consensus is that the Reserve Bank will lower interest rates by another three quarter percent next month. This will probably be followed by another cut of half a percent in February and a further quarter percent reduction in March, to take the cash rate to 3.75 per cent.
If these interest rates materialise then it would further reduce another $287 off monthly repayments on a standard variable loan of $300,000.
While most major banks have not passed on the full benefits of the recent falls in official rates, a dramatic cut in Reserve Banks rate would see a significant drop in variable rates.
The four major banks currently charge about 7.73 percent, but with the predicted falls could bring the standard variable rate down to 6.5 per cent or even lower.