By Nhada Goodfellow
Melbourne, May 10 (BridgeNews) - Four of the Reserve Bank of Australia's most senior officials, including Governor Ian Macfarlane, will face about three hours of questioning from the 10 members of the House of Representatives Economics Committee on Friday to explain, among other things, the RBA's quick-fire cuts to the official cash rate earlier this year, the committee announced Thursday.
* * * "Given the slowdown of the Australian economy and the prospect of further interest rate reductions, the hearing will be very timely and important," committee chairman David Hawker said in a statement Thursday. Hawker said the RBA officials will be questioned about the cause of the economic slowdown in Australia, the trend in unemployment, recent falls in business confidence, the outlook for the U.S. economy, the outlook for policy and credit card interchange fees.
"We will take the opportunity to question the Governor extensively about the current economic situation in Australia and the full operations of the bank," Hawker added.
The RBA cut the cash rate after each of its first three monthly board meetings for the year, starting in early February. It chose to leave the rate steady at 5.0% after its May board meeting last week but most economists see at least one more reduction during the current easing cycle. (Story .1525)
Macfarlane, along with three assistant governors--Ric Battellino, John Laker and Glenn Stevens, will appear before the committee in the Legislative Council Chamber of the Victorian Parliament from 1000 AET on Friday.
The Governor and several of his colleagues from the bank appear before the committee twice a year, following the release of the RBA's statement on monetary policy.)
The statement was r eleased earlier this week and in it the RBA said it expects inflation to remain benign for the year ahead, amid early signs of a confidence pick-up, a housing recovery and with "accommodative" market conditions.)
The RBA said there were encouraging signs on the growth front in Australia, but it "remains unclear" whether these signs would turn into a "sustained strengthening of growth."