A dramatic slowdown in the pace of inflation has given the Reserve Bank of Australia leeway to cut the official cash rate for the first time since April 2009.
According to the futures market, it is virtually a done deal that the bank will cut the rate by a quarter of a percentage point to 4.5% at its board meeting on Melbourne Cup Day on Tuesday - an hour before the running of the race.
Radio New Zealand's Sydney correspondent says this would be the first rate reduction in two and a half years and bring Australian interest rates down from levels that are the highest in the OECD.
Slowing domestic demand and signs of weaker growth abroad have built the case for a rate cut in recent months .
But the icing on the cake was an extremely benign set of quarterly CPI figures last week, which showed underlying inflation slowing to around the bottom of the RBA's target band of 2%-3%.
