THE NEWS WRAP: Business keen on more rate cuts as RBA holds

Business groups have raised hopes that the Reserve Bank will cut interest rates in the coming months, after yesterday’s decision to freeze the official cash rate at 3.5%.

Australian Chamber of Commerce and Industry economics director Greg Evans told The Australian: “We understand the RBA wants to see how the most recent round of easing plays out in the real economy.”

“But, based on feedback through the mainstream economy, we have limited evidence at this point that (in) some areas, including manufacturing and construction, the benefit has registered.”

“We still think further reductions will occur in this half of 2012, as European instability is far from over and this will be a rolling source of angst affecting financial markets.”

ASX mulls business funding changes

Businesses looking to raise money from their shareholders could find the process easier under proposals being pondered by the Australian Securities Exchange.

According to The Australian Financial Review, the ASX is looking at changing the system so that companies get money 10 days faster than under the current set-up.

US economy ‘tepid’: IMF

The US economy “remains tepid” and will grow by just 2% this year, according to the International Monetary Fund.

The IMF’s annual report has cut the US’ growth forecast from 2.1% to 2%, citing the eurozone debt crisis, uncertainty over domestic policies and the November presidential election as causes for concern.

Overnight

The Dow Jones Industrial Average rose by 63.76 points, or 0.50%, to 12,935.15. The Australian dollar shot up to US102.9 cents.