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THE Reserve Bank is likely to cut interest rates by 50 basis points tomorrow, in an aggressive move to safeguard the Australian economy from the savage fallout sparked by the global rout of financial markets.

But few economists expect the banks to pass on the rate cut in full, and nor is the Rudd Government demanding they do so.

While Wayne Swan has called for a "maximum possible pass-on" of any official rate cut, the Treasurer accepts that banks have been hit by a substantial rise in borrowing costs.

But Opposition treasury spokeswoman Julie Bishop yesterday accused Mr Swan of putting bank profits ahead of the interests of ordinary Australians.

"We need the banks to step out from behind Mr Swan and tell the Australian people why they should get the benefit of an interest rate cut, and not the small businesses, the home owners, the families who need relief at this time," she said.

The global turmoil caused by the credit crisis is expected to result in the Australian stock market opening lower today.

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