AAP        May 01, 2012

FORMER Reserve Bank of Australia governor Bernie Fraser has joined the chorus of calls for a cut to the cash rate today saying it should be slashed by 50 basis points.

But, despite similar calls from industry groups – including the Housing Industry of Australia – the RBA is expected to cut by just 25 basis points.

All 16 economists surveyed by AAP last week expect the RBA to cut the cash rate at its May 1 board meeting.

Mr Fraser said because the expectation was for a 0.25 per cent cut the central bank lost its impact if it did not provide a bigger drop.

“You have to get ahead of the game occasionally and trump those expectations,” he told ABC’s 7.30 last night.

The RBA has kept the cash rate on hold at 4.25 per cent since December but is expected to cut today following the release of weaker than expected inflation data last week.

HIA chief economist last week said a 50bps cut would be a “bold move” but was appropriate given the economy was not doing as well as expected.

However, economists expect a cut of 25 basis points today, though most believe a similar cut will follow in June.

READ MORE: http://www.perthnow.com.au/business/rba-rate-cut-expected-today-economists/story-e6frg2qc-1226343392782