Aussie Home Loans Calls For RBA To Pause Rate Hikes

Post by Sharat on November 26, 2009 · Under Australian Economy, Business News, Company News, Non Bank Finance, interest rates · Comment

Non bank finance company and leading mortgage broker Aussie Home Loans has called for the Reserve Bank of Australia (RBA) to leave interest rates unchanged when it holds its monthly board meeting next week, or risk hurting retail sales during the traditionally busy Christmas shopping season.

Economists and the financial markets are predicting that the central bank is likely to raise the official interest rate to 3.75 per cent or by 25 basis points when it meets next Tuesday.

John Symond, executive chairman of Aussie Home Loans says that credit continues to remain in short supply, and further interest rate rises would negatively impact consumer confidence and reduce lending, despite indications that the Australian economy has put the worst of the downturn in the global economy behind it.

“We are heading into the crucial Christmas retail season and a rate hike will hurt sales and create further concerns for households. The economy is recovering but is susceptible to any economic shocks, which continue to be felt overseas. The Reserve Bank needs to be very cautious in lifting rates prematurely.” Mr. Symond said in a statement on Thursday.

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