Will the RBA succumb to easing rates?

THE Australian dollar fell to a low of 0.6900 against the US dollar in August, levels not seen since the economic crisis of 2008-2009. A crash in iron ore and gold prices and a slumping commodities market were the main causes for this downward spiral from which AUD has yet to recover.

Australia, the 19th largest export economy worldwide as well as the third biggest producer of gold in the world, was one of the worst hit by the rout in commodities prices.

Framed against this backdrop of economic uncertainty, the question posed in most people's minds is: Will the Reserve Bank of Australia (RBA) reduce its cash rate and introduce a fresh wave of easing after it announced its recent decision to retain the current cash rate of 2 per cent, but offers scope for easing if needed?