June 7, 2010, Australia – According to the latest report from the Reserve bank stated that the possible increase on the rates even though there is a fear of instability in Europe. Following from the reported six rate rises in the past seven board meetings, the Reserve Bank have decided in opposition to a further move, saying the current level of official interest rates of 4.5 per cent was “appropriate for the near term”.
However according to the Governor Glenn Stevens that there will be a lot of conversation and discussion in regards about the European debt crisis, indeed the Reserve bank has a huge viewpoints that flourishing of the commodity prices would increase the incomes and demand over the year ahead. With the pressure that has been put on the prices will definitely in their way. “Inflation appears likely to be in the upper half of the target zone over the next year,” he said.
In line with the statement from the RBS chief economist Kieran Davies stated that the Reserve Bank will likely keep their rates for both its June and July meetings, although they would eventually lift rates again in August subsequent to the release of the next inflation figures.
“There is a strong case for the Reserve Bank to sit out the winter on interest rates and not contemplate an increase for at least three months to help rebuild momentum and confidence in the economy,” the Australian Chamber of Commerce and Industry’s policy director, Greg Evans, said.
Source: The Wall Street Journal News
