Interest Rate Increase

It’s another increase in the cash rate from the RBA again with 25 basis points being added for a current rate of 4%. The Reserve Bank has lifted the rate again due to better than expected GDP. Although homeloan repayments will be higher, this is good news as our economy continues to grow.

Reserve Bank Increases Interest Rate

The Reserve Bank of Australia has increase the cash rate by 0.25 percentage points for a second consecutive month to bring a total of 3.5%. This is the highest that Australia’s official interest rate has been since December of 2008. Most of the big banks have already increased their home loan rates which will mean an additional $46 dollars per month on a $300,000 mortgage.

Although it may be hard on businesses and families, Federal Treasurer, Mr Swan, has warned that more changes are on the horizon due to the recovering Australian economy. Reserve Bank Governor, Glenn Stevens, stated that this growth is likely to continue.

Australia’s Economy – Glenn Stevens

As part of the Public Policy Breakfast Forum at the John Curtain Institute of Public Policy, Glenn Stevens, Governor of the Reserve Bank of Australia, shared his thoughts about the current economic climate we are experiencing. As home owners, buyers, and investors, we have all been interested to know what the global financial crisis means for Australia. Glenn Stevens offered some hope on the economic situation.

According to Mr Stevens, the economy is probably past its weakest point, and excluding any great international setbacks, it is likely to continue to improve into 2010. He does however mention that we need to encourage a sustainable and responsible amount of growth.

To read the full address, download RBA – The Conduct of Monetary Policy in Crisis and Recovery

What are your thoughts on this topic? Has Australia managed to be relatively unscathed by the recent economic turmoil? Or are we simply lagging behind and are yet to feel any real economic pain?