The influential billionaire Solomon Lew slams the RBA in The Australian. It will be interesting to see whether the RBA staff get rolled by a combination of their ultra dovish board and outsiders like Lew (remember self-declared 'dove', 'growth girl' and manufacturing industry lobbysit, Heather Ridout, has just joined the board too). I am not calling it right now (ie, I currently expect them to hold), but maybe the RBA will lose its nerve at the April meeting and cut to acquiesce to all these vested interests (including ALP economists who want to see lower rates to improve the Government's chances at the next election):
"I really believe the Reserve Bank has mishandled the mining boom to the great detriment of the non-mining sector and particularly retail, which is one of the key drivers of economic activity," Mr Lew said after the result was announced to the market.
"I'd be calling on the Reserve Bank to cut interest rates by 50 to 75 basis points at the next meeting. I think the Australian economy's in trouble."
The RBA has left interest rates on hold since December, when the official cash rate was lowered to 4.25 per cent. The board next meets on April 3.
Mr Lew, then chairman of Coles Myer, was a member of the RBA board from 1992 to 1997 -- a term that overlapped those of David Jones's then chairman Dick Warburton and Westfield chairman Frank Lowy.
"I'm not sure they have that market knowledge today . . . I have a view that they're not in touch with the market, they don't understand where the economy's at, at the moment," Mr Lew said.
The RBA's only current member with experience in the retail sector is former Woolworths chief executive Roger Corbett.
