RBA Governor Glenn Stevens Warns of Rate Rise

By Bizclik Editor

 

At the Economic Society of Australia in Brisbane yesterday, Reserve Bank Governor Glenn Stevens warned that interest rates will rise in coming months, largely because of the two-speed economy that is moving at different rates.

The move to raise interest rates is to keep inflation controlled. Sentiment is that “the windfall from the mining boom for consumers was not obvious, most Australians were benefiting from a higher Australian dollar and low unemployment,” The Australian reported.

The Reserve Bank upheld its forecasts from May, with Stevens saying that, “further tightening of monetary policy is likely to be required at some point for inflation to remain consistent with the 2 per cent to 3 per cent medium-term target.”

“It remains, though, a matter for judgment by the (RBA) board as to whether that point has been reached,” Stevens said. “As far as prices are concerned, we will get another comprehensive round of data in late July,” he said, adding monetary policy has been exerting some restraint.

Stevens implied the Bank may consider an interest rate increase in August after official inflation data for the three months ended June 30 was released next month. “As far as prices are concerned, we will get another comprehensive round of data in late July,” he said. The RBA has kept the official cash rate at 4.75 per cent since November following indications that the housing market is slowing.

Following the speech on Wednesday, the S&P/ASX 200 index closed down 18.2 points, or 0.4 per cent, at 4566.8, with analysts commenting that sentiment is still delicate.

Share

Featured Articles

Nine must-attend sustainability events for business leaders

From London to Abu Dhabi, Singapore to San Diego, these sustainability-focused events are designed to help business leaders action their ESG goals

Daniel Weise of BCG on new supply chain and procurement book

Daniel Weise, global leader of Boston Consulting Group’s procurement business line, on the timely publication of his new book, Profit From The Source

Attract and retain talent with flexible working and benefits

From office shut-downs and extra days off, to shorter weeks and work-from-anywhere policies, flexibility is the work perk must-have for summer – and beyond

Nurturing the next generation of women leaders in Africa

Leadership & Strategy

5 Mins With: Cybersecurity expert Ariel Parnes of Mitiga

Technology

People Moves: Pine Labs, Deutsche Bank, McKinsey, Fortinet

Leadership & Strategy