RBA Says Further Interest Rate Hikes Likely

Post by NeilMc on March 18, 2010 · Under Australian Economy, Business News, banking, interest rates · Comment 

Guy Debelle, an assistant governor with the Reserve Bank of Australia has warned that it was extremely likely that interest rates would rise further, but said that central bank was acutely aware that higher levels of household debt, means that tightening monetary policy had a far greater impact than it did in the past.

Speaking at a conference in Melbourne, Mr Debelle said interest rates “look likely to rise a bit further”.

The RBA at the beginning of March, raised the official cash rate by 25 basis points to 4 per cent.

The central bank has tightened interest rates four times during the last six months, after interest rates were lowered to nearly half century lows in response to the global financial crisis.

The RBA notes that the securitisation market appears to have thawed, with a number of deals having successfully been completed this year.

“It is now becoming a competitive source of funds again,” he said.

Mr Debelle said lending from non-bank lenders was on the rise and this was because their source of funding was now close to being competitive with that of the larger banks.

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