Interest rates likely to fall

There is a 60 per cent chance that the Reserve Bank would cut the official cash rate from 5.5 per cent to 5 per cent in three weeks, Deutsche Bank said.

"If the Reserve Bank is planning to go to 5 per cent anyway during this cycle, it will be bold and move early," Deutsche Bank chief economist Ulf Schoefisch said.

There would be at least another cut on July 24, taking the official cash rate down to 4.75 per cent Deutsche Bank said.

Other economists have predicted a 25 basis point cut on June 6, especially given Government Budget forecasts this week forecasting a sharp slowdown in growth this year.

The Budget predicts economic growth will halve from 4.4 per cent in the past year to just 2.2 per cent in the year to March 2004.

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