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2007
Finance minister shuts down rumours of rate rise
Monday September 7, 2009
Talks of an eminent interest rate rise have prompted the Federal Finance Minister to quash rumours of a hike happening soon.
Lindsay Tanner stated in an interview with ABC Radio that interest rates will not be increased soon, stating "The Reserve Bank is not indicating that,"
In recent days, the Reserve Bank of Australia has stated that it will have its official rate remain steady at three per cent after assessing various aspects of the Australian economy.
These included unemployment, economic growth, consumer spending and credit growth, finding that Australia's national economy was recording strong recovery growth with its economic conditions stronger than expected.
While the central bank did leave the official cash rate at its 49-year low of three per cent, it indicated in the meeting minutes and subsequent governor's statement that rates may rise in the future, leading economists to predicts as soon as October.
"It has given no indication as to when that might be and it is unclear as to what point we will see a return to ordinary growth in the Australian economy. It is certainly not happening in the immediate future."
The Finance Minister went on to reject suggestions that the economic stimulus package will result in an interest rates rise, explaining that the stimulus package had received support at the recent G20 finance ministers meeting in London. The Federal Government have been adamant that reducing the stimulus package spending now would cause significant harm to the Australian economy, even extending into jobs losses.
"What Treasury is saying, what our Government is saying, and indeed what nations around the world are saying through the G20 meeting, is that we need economic stimulus to support jobs now," Employment Minister Julia Gillard told ABC 2.
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