05/12/12: RBA cuts cash rate to 3%

But the song remains the same

While the RBA once again loosened monetary policy in December, the Bank continues to see a silver lining on every economic cloud and is yet to acknowledge that the Australian economy is entering a much more difficult environment now that mining investment has peaked. While many believe that the RBA will ultimately be forced to cut the cash rate to 2%, it seems pretty clear that the RBA still remains hopeful that the rate cuts it has already undertaken will be sufficient to revive growth. As such, it appears that until there is irrefutable proof that mining investment has peaked, or that unemployment is rising sharply, the RBA will remain a reluctant rate cutter, as indeed it has been over the past year. Rick Maggi  Update: Since the 25 basis point cut yesterday, most of the major banks have since cut their loan rates by about 20 basis points.