While economists agree that an overnight cash rate cut by the Reserve Bank of Australia (RBA) is unlikely this week, Westpac chief economist Bill Evans foresees the current 2.75 per cent key lending rate likely plunging to record low 2 per cent.

"We retain our position that the terminal cash rate will be 2 per cent, with single moves in August, late 2013 and early 2014," The Herald Sun quoted Mr Evans.

The economists cited the weakening of the Australian dollar, which has declined 6 per cent against the greenback, as the reason behind why the RBA would likely retain the current benchmark lending rate when it meets Tuesday, June 5.

HSBC chief economist Paul Bloxham said the currency staying below parity would likely be the signal of the end of the rate cutting cycle.

"The depreciation of the Australian dollar supports local growth and shifts the balance of risks on inflation to the upside," he said.

However, AMP Capital chief economist Shane Oliver urges the RBA to cut the overnight cash rate by another 25 basis points on Tuesday because the Australian dollar has not dropped far enough.

"Forward looking job indicators are soft and the toughish budget and Ford's decision to quit manufacturing seems to have added to the sense of gloom surrounding the Australian economy. As a result with low inflation providing plenty of scope to ease the RBA should act again on its easing bias and on balance we think it will," The Herald Sun quoted Mr Oliver.

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