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More figures to show if rate cut warranted

AAP logoAAP 28/07/2016

New figures may hint as to how long Australia will remain in an ultra-low inflation environment and whether an imminent interest rate cut is needed.

The June quarter producer price index is released on Friday, which gauges what price pressures businesses are facing, and comes after the consumer price index earlier this week showed inflation at a 17-year low.

In the March quarter, the PPI showed prices declined 0.2 per cent in the final phase of production, for a modest 1.2 per cent rise over the year - one reason why consumers have continued to see only limited price pressures.

The Reserve Bank will also release its monthly credit data, which provide a sign of demand within the economy.

The central bank will hold its monthly board meeting next Tuesday.

Financial markets see a 60 per cent chance the board will agree to cut the cash rate to 1.5 per cent from an already record low of 1.75 per cent.

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