As per recent reports, it has been revealed that a third cut is expected from the side of the Reserve Bank of Australia. Experts said that there could be three reasons for announcing interest rate cuts. First, it could be due to the decline in the inflation, and second the employment rate has gone down even more and third reason could be looming fears of European recession.

It would be a third consecutive cut, and 13 economists out of 14 think that the RBA would reduce the interest rates to 4% from 4.25%. The meeting is scheduled to take place on February 7, said experts. Last time, the RBA reduced the rate from 4.75% to 4.25%.

HSBC chief economist Paul Bloxham said that announcement of the cut would not be a surprise for them as they have been expecting such news for quite some time now. He further affirmed that inflation figure and declining employment rate has strengthened the February rate cut news.

There is no doubt that Australia's employment conditions have been getting poor than ever as the December unemployment rate was 5.2%, which is much higher than 4.9% in April of 2011. However, there is a little hope of growth by the April of 2012. It is expected that conditions would improve then, said Bloxham.

Agreeing to the same, AMP Capital chief economist, Shane Oliver, said that the growth is expected in the first half of 2012. Recently, conditions have improved at the global level which has proved beneficial for Australia.

There are some people who are not happy with February cut. One of them is ICAP senior economist Adam Carr. He said, "I say that because even the RBA board acknowledged in December that there probably wasn't really an economic justification to cut, they were doing it pre-emptively because of Europe but Europe has stabilized".