A Reuters survey of 25 economists on the chance of an easing in the official 5.00 per cent cash rate produced a median of 80 per cent, with the only real

Betting was evenly split between those looking for a move before year-end and those assuming the central bank would hold off until theip February board meeting at the earliest.

They were also confident any cut would not be the last, with the median prediction for the trough of the cash rate at 4.25 per cent, while one bold forecaster went as low as 3.50 per cent.

"A cut is as close to a sure thing as you get in economics," said Tony Meer, a senior economist at Deutsche Bank Australia.

"But we think the bank will let the Fed do the running and wait for February when it will have a lot more data on the domestic economy to justify the move," he said.

The Fed cutthe funds rate 0.25 point to 5.00 per cent, matching Australian rates for the first time since July 1997.

The timing of the move, only three weeks after its first easing and well ahead of the next November 17, suggested to analysts the central bank was going to be more aggressive than many had expected.

"The cut has signalled how concerned the Fed chairman Alan Greenspan is about the impact of the credit crunch on the US economy," said Bill Evans, general manager economics at Westpac.

"It also makes another cut at the November meeting almost a certainty and 50 basis points should not be ruled out," he said.

Such an easing would give the Australian dollar a positive interest differential against its US counterpart for the first time in more than a year and offer scope for the RBA to ease without risking too much collateral damage to the currency.

Indeed, the two easings already delivered by the Fed have played a part in lifting the dollar to 64 US cents on Friday from 58 cents just last week.

Thiswas important since the bank had been worried the weakness of the dollar -- it hit an all-time trough of 55.30 cents in August -- would feed through into domestic inflation.

In its last economic report in August, the bank predicted underlying inflation would peak at 2.4-3.0 per cent in the second half of 1999. But spreading signs of global disinflation since then have convinced many analysts the bank was too pessimistic.

"We believe inflation will not get much above two per cent so providing plenty of room for an easing, Said John Kyriakopoulos, senior economist at J.P. Morgan Australia,

He noted the September quarter inflation data due on October 28 were likely to show annual inflation rate in the underlying measure stayed below 2.0 per cent for the sixth quarter running.

"When the RBA realises inflation will undershoot its target and we get another Fed cut in November, it will present too good an opportunity to miss," he said, predicting a cut of at least 25 basis points by year-end.

As well aslow inflation, recent domestic data have also shown creeping weakness in some leading indicators such as building approvals and lending finance, which has most analysts looking for growth to slow towards 2.00 per cent from nearly 4.0 per cent in 1998.

Such a rate of growth would not be enough to lower the rate of unemployment, and the RBA charter entrusts it with the maintenance of full employment.

Giving the RBA some leeway was the fact that Australian banks were in far better shape European brethren.

"Almost uniquely in the major economies, Australian banks have little exposure to the trouble spots of South America and Russia or to hedge funds," said Stephen Roberts, group economist at fund manager Equitilink.

They remained very profitable, had sound balance sheets and were well supervised, so the risk of a credit crunch here was far less than in the US, he said.