RATES TO STAY

Written on the 18 February 2010

RATES TO STAY

THE Reserve Bank of Australia (RBA) has made an unexpected move to leave interest rates unchanged today at 3.75 per cent.

RBA governor Glenn Stephens says the decision was made because lenders have been charging above the cash rate and the effects are still uncertain.

“Lenders have generally raised rates a little more than the cash rate over recent months and most loan rates have risen by close to a percentage point,” says Stephens.

“Since information about the early impact of those changes is still limited, the board judged it appropriate to hold a steady setting of monetary policy for the time being.”

But in his statement issued today Stephens hinted at further rate rises if the economy continues to recover as expected, as interest rates to most borrowers are still lower than average.

“If economic conditions evolve broadly as expected, the Board considers it likely that monetary policy will, over time, need to be adjusted further in order to ensure that inflation remains consistent with the target over the medium term.”

Suncorp Bank executive manager Tim Buckett says if the economy continues to strengthen the RBA will likely move rates back to normalised levels over the next six to eight months.

“The low rates seen throughout 2008-09 during the economic crisis were simply not sustainable in the long-term for Australia,” he says.


Latest News

AUSTRALIA READY TO DISRUPT GLOBAL CARBON FIBRE MANUFACTURING

AUSTRALIA for the first time has the capacity to produce carbon fibre from scratch and at scale, following the launch...

HONG KONG FUND INVESTS $212.8 MILLION IN G8 EDUCATION

G8 EDUCATION (ASX: GEM) has secured $212.8 million from Hong Kong-based CFCG Investment Partners to pay down debt and...

MERGER DELIVERS THE FINANCIAL GOODS FOR TERRY WHITE

TERRY White Group has posted a solid half-year net profit of $1.3 million amid a period of major transformation fo...

BLUE SKY APPOINTS TWO NEW INDEPENDENT DIRECTORS

BLUE Sky Alternative Investments (ASX: BLA) has appointed two new independent, non-executive directors to its board: ...

Related News

WHY EMPLOYEE-OWNED COMPANIES ARE BEATING ASX200 SHARE PRICES

EMPLOYEE-owned companies command a higher share price than their publicly listed peers, reaping a 17 per cent prem...

RISE OF THE MACHINES HAS WORKERS SWEATING

UP TO 3.8 million Australian workers are fearful their job may soon be terminated by a robot, a new survey has shown....

LESS TALK, MORE SMALL BUSINESS ACTION IN 2017

THE future growth and prosperity of Australian SMEs could be undermined if governments lose sight of the sector...

TEST DRIVE A POST GRAD AT BOND

THERE'S only one way to really move your career into the fast lane, says Bond University, and 'test driving...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter