More Interest rate Rise Not Good For Australian Economy
According to Herston Economics chief economist Clifford Bennett says if the Reserve Bank of Australia (RBA) raises the cash rate to five per cent by year’s end, the economy would “grind to a standstill”.
As on 6 april 2010 the RBA Board decided to raise the cash rate by 25 basis points to 4.25 per cent, effective 7 April 2010.According to press release with the risk of serious economic contraction in Australia having passed some time ago, the Board has been lessening the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker. Lenders have generally raised rates a little more than the cash rate.The Board judges that with growth likely to be around trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average. Today’s decision is a further step in that process.
It was the fifth monthly interest rate rise by the central bank since October last year.