Major bank boss warns against rate cuts

by Adam Smith28 Jan 2015
A major bank boss has warned against RBA rate cuts.

ANZ CEO Mike Smith has told The Australian Financial Review that the falling Australian dollar should stay the Reserve Bank's hand. Smith said the Bank should wait to see the effects of the lower Aussie dollar filter through the economy.

“If I was the central bank I would wait and see how this plays out because if the currency can take most of the shock, it’s a much better way to deal with it,” Smith told The AFR.

Smith said the RBA would still retain the option of using monetary policy later in the year.

The ANZ boss' statements stand in contrast to the bank's predictions. The bank has previously predicted the RBA will cut the cash rate twice in the first half of 2015.