http://australianpolitics.com Resources, News & Commentary from Malcolm Farnsworth Tue, 07 Feb 2012 03:23:43 +0000 en hourly 1 http://wordpress.org/?v= Resources, News & Commentary from Malcolm Farnsworth AustralianPolitics.com no Resources, News & Commentary from Malcolm Farnsworth http://australianpolitics.com/wp-content/plugins/powerpress/rss_default.jpg http://australianpolitics.com/category/issues/reserve-bank-issues http://australianpolitics.com/2011/12/06/reserve-bank-cuts-interest-rates-again.html http://australianpolitics.com/2011/12/06/reserve-bank-cuts-interest-rates-again.html#comments Tue, 06 Dec 2011 04:10:33 +0000 Malcolm Farnsworth http://australianpolitics.com/?p=4607 http://australianpolitics.com/2011/12/06/reserve-bank-cuts-interest-rates-again.html/feed 0 Glenn Stevens,interest rates,Wayne Swan The Reserve Bank of Australia has cut interest rates for the second month in a row. - The reduction of 25 basis points - 0.25% - takes the cash rate to 4.25%. - The Treasurer, Wayne Swan, welcomed the cut, describing it as "welcome Christmas cheer". The Reserve Bank of Australia has cut interest rates for the second month in a row. The reduction of 25 basis points - 0.25% - takes the cash rate to 4.25%. The Treasurer, Wayne Swan, welcomed the cut, describing it as "welcome Christmas cheer". He called on the banks to pass on the reduction in full. Table of Australian interest rate fluctuations since 1990 Listen to Wayne Swan's comments on the rate cut: PLAY Statement on Monetary Policy from Glenn Stevens, Governor of the Reserve Bank of Australia. At its meeting today, the Board decided to lower the cash rate by 25 basis points to 4.25 per cent, effective 7 December 2011. Growth in the global economy has moderated this year after a strong performance in 2010. Some of the slowing reflected temporary factors, and as these passed, the pace of expansion in the United States and much of Asia began to pick up around mid year. China's growth has been slowing, as policymakers there had intended. Trade in Asia is now, however, seeing some effects of a significant slowing in economic activity in Europe. The sovereign credit and banking problems in Europe, to which European governments are still seeking to craft a full response, are likely to weigh on economic activity there over the period ahead. Financial markets have experienced considerable turbulence, and financing conditions have become much more difficult, especially in Europe. This, together with precautionary behaviour by firms and households, means that the likelihood of a further material slowing in global growth has increased. Commodity prices have reflected this, declining further over recent months and taking pressure off CPI inflation rates. This has increased the scope for some easing in monetary policy in a number of countries. Information about the Australian economy suggests output growth has been close to trend, with demand growth stronger than that. The terms of trade have now peaked and will decline somewhat in the near term, but they remain very high. In response, investment in the resources sector is picking up very strongly, with much more to come. Some related service sectors are enjoying better-than-average conditions. In other sectors, changed behaviour by households and the high exchange rate have had a noticeable dampening effect. The unemployment rate has increased a little since mid year, though it remains close to 5 per cent. CPI inflation on a year-ended basis remained above the target at the latest reading, due to the effects of weather events last summer, but is now starting to decline as production of key crops recovers. Moreover, with labour market conditions now softer, the likelihood of a significant acceleration in labour costs outside the resources and related sectors in the near term has lessened. Accordingly, the Bank's current judgement is that inflation is likely to be consistent with the 2–3 per cent target in 2012 and 2013, abstracting from the impact of the carbon pricing scheme. The reduction in the cash rate as a result of the Board's previous decision flowed through to lending rates, which are now around their average level of the past 15 years. Short-term market interest rates have tended to decline a little further in recent weeks, though term funding conditions for financial institutions have become more difficult. Credit growth remains subdued and asset prices have declined further over recent months. The exchange rate has been quite variable over the past few months, but remains at an historically high level. Overall, the Board concluded, on the basis of all the available information, that the inflation outlook afforded scope for a modest reduction in the cash rate. The Board will continue to set policy as needed to foster sustainable growth and low inflation over time. AustralianPolitics.com no http://australianpolitics.com/2011/11/01/reserve-bank-lowers-interest-rates-0-25.html http://australianpolitics.com/2011/11/01/reserve-bank-lowers-interest-rates-0-25.html#comments Tue, 01 Nov 2011 04:27:06 +0000 Malcolm Farnsworth http://australianpolitics.com/?p=4439 http://australianpolitics.com/2011/11/01/reserve-bank-lowers-interest-rates-0-25.html/feed 0 http://australianpolitics.com/2011/02/01/reserve-bank-leaves-rates-on-hold.html http://australianpolitics.com/2011/02/01/reserve-bank-leaves-rates-on-hold.html#comments Tue, 01 Feb 2011 03:45:18 +0000 Malcolm Farnsworth http://australianpolitics.com/?p=4067 http://australianpolitics.com/2011/02/01/reserve-bank-leaves-rates-on-hold.html/feed 0 http://australianpolitics.com/2010/11/26/glenn-stevens-statement-to-economics-committee.html http://australianpolitics.com/2010/11/26/glenn-stevens-statement-to-economics-committee.html#comments Fri, 26 Nov 2010 02:54:19 +0000 Malcolm Farnsworth http://australianpolitics.com/?p=2062 http://australianpolitics.com/2010/11/26/glenn-stevens-statement-to-economics-committee.html/feed 2 http://australianpolitics.com/2009/03/19/what-caused-the-financial-crisis.html http://australianpolitics.com/2009/03/19/what-caused-the-financial-crisis.html#comments Thu, 19 Mar 2009 02:27:12 +0000 Malcolm Farnsworth http://australianpolitics.com/?p=485 http://australianpolitics.com/2009/03/19/what-caused-the-financial-crisis.html/feed 0 http://australianpolitics.com/2008/11/04/reserve-bank-cuts-interest-rates-another-075.html http://australianpolitics.com/2008/11/04/reserve-bank-cuts-interest-rates-another-075.html#comments Tue, 04 Nov 2008 03:31:26 +0000 Malcolm Farnsworth http://australianpolitics.com/?p=364 http://australianpolitics.com/2008/11/04/reserve-bank-cuts-interest-rates-another-075.html/feed 0 interest rates,Reserve Bank,Wayne Swan The Reserve Bank of Australia has cut the cash rate a further 0.75% to 5.25%. - The 0.75% cut follows reductions of 1.0% in October and 0.25% in September. - Listen to Treasurer Wayne Swan comment on the interest rate decision: - LISTEN The Reserve Bank of Australia has cut the cash rate a further 0.75% to 5.25%. The 0.75% cut follows reductions of 1.0% in October and 0.25% in September. Listen to Treasurer Wayne Swan comment on the interest rate decision: LISTEN This is the text of a statement from the Governor of the Reserve Bank, Glenn Stevens: At its meeting today, the Board decided to reduce the cash rate by 75 basis points to 5.25 per cent, effective 5 November 2008. World financial markets have remained turbulent over the past month. Global equity prices have been volatile and fell further in net terms, and there have been significant exchange rate movements, including a sharp depreciation of the Australian dollar. A number of governments have announced measures to strengthen their financial systems, which should help to stabilise conditions over time. International economic data have continued to point to significant weakness in the major industrial economies, and there have been further signs that China and other parts of the developing world are slowing as well. These conditions have contributed to further falls in world commodity prices. In Australia, the overall path of economic activity appears until recently to have been close to what the Board had expected, with a needed moderation in demand occurring after a period of earlier strength. Recent reductions in borrowing rates, the depreciation of the exchange rate and the fiscal stimulus announced in October will work to assist growth in the period ahead, but deteriorating international conditions and falling commodity prices will have a dampening influence. On balance, it appears likely that spending and activity will be weaker than earlier expected. Consumer price inflation in Australia remained high in the September quarter. As expected, CPI inflation in year?ended terms picked up to 5 per cent, while underlying measures were just over 4½ per cent. Nonetheless, capacity pressures are now easing and, given the outlook for more moderate growth in demand and activity, it is reasonable to expect that inflation in Australia will soon start to fall. Global disinflationary forces will assist in this regard, though the depreciation of the exchange rate means that the decline of inflation to the target could take longer than would otherwise be the case. Weighing up these international and domestic developments, the Board judged that a further significant reduction in the cash rate was warranted. The Board will continue to monitor developments and make adjustments as needed to promote sustainable growth consistent with achieving the 2–3 per cent inflation target over time. AustralianPolitics.com no http://australianpolitics.com/2008/10/21/global-economic-catastrophe-now-less-likely-says-reserve-bank-governor.html http://australianpolitics.com/2008/10/21/global-economic-catastrophe-now-less-likely-says-reserve-bank-governor.html#comments Tue, 21 Oct 2008 12:44:20 +0000 Malcolm Farnsworth http://australianpolitics.com/?p=320 http://australianpolitics.com/2008/10/21/global-economic-catastrophe-now-less-likely-says-reserve-bank-governor.html/feed 0 http://australianpolitics.com/2008/10/09/its-really-bad-but-economy-in-strong-shape-says-rudd.html http://australianpolitics.com/2008/10/09/its-really-bad-but-economy-in-strong-shape-says-rudd.html#comments Thu, 09 Oct 2008 03:43:08 +0000 Malcolm Farnsworth http://australianpolitics.com/?p=223 http://australianpolitics.com/2008/10/09/its-really-bad-but-economy-in-strong-shape-says-rudd.html/feed 0 banks,financial crisis,Julia Gillard,Kevin Rudd,superannuation,World Economic Forum Kevin Rudd, has said the international financial situation is "really bad, let's not mince words about it". - But the Prime Minister emphasised the soundness of the Australian banking system, referring to a report from the World Economic Forum. Kevin Rudd, has said the international financial situation is "really bad, let's not mince words about it". But the Prime Minister emphasised the soundness of the Australian banking system, referring to a report from the World Economic Forum. He said: "Australia is ranked fourth out of 134 and to put that into context the UK ranks at number 44, the United States number 40 and Germany at number 39." Rudd said that the financial crisis would have a direct impact on superannuation funds. The Prime Minister spoke this afternoon at a press conference with the Deputy Prime Minister, Julia Gillard. Listen to Rudd and Gillard's press conference: LISTEN AustralianPolitics.com no http://australianpolitics.com/2008/10/07/reserve-banks-cuts-interest-rates-by-one-percent.html http://australianpolitics.com/2008/10/07/reserve-banks-cuts-interest-rates-by-one-percent.html#comments Tue, 07 Oct 2008 03:34:02 +0000 Malcolm Farnsworth http://australianpolitics.com/?p=211 http://australianpolitics.com/2008/10/07/reserve-banks-cuts-interest-rates-by-one-percent.html/feed 0 http://australianpolitics.com/2008/03/04/interest-rates-up-again.html http://australianpolitics.com/2008/03/04/interest-rates-up-again.html#comments Tue, 04 Mar 2008 05:04:10 +0000 Malcolm Farnsworth http://australianpolitics.com/2008/03/04/interest-rates-up-again.shtml http://australianpolitics.com/2008/03/04/interest-rates-up-again.html/feed 1 CPI,Glenn Stevens,interest rates,monetary policy The Reserve Bank of Australia today increased interest rates by a further 0.25%. - The increase takes the cash rate to 7.25%. - It is the second consecutive increase this year. Interest rates are now at a 12-year high. - The Reserve Bank of Australia today increased interest rates by a further 0.25%. The increase takes the cash rate to 7.25%. It is the second consecutive increase this year. Interest rates are now at a 12-year high. Listen to Kevin Rudd and Wayne Swan discuss the increase at a press conference this afternoon: Listen This is the text of the statement today from the Reserve Bank. STATEMENT BY GLENN STEVENS, GOVERNOR MONETARY POLICY At its meeting today, the Board decided to increase the cash rate by 25 basis points to 7.25 per cent, effective 5 March 2008. This adjustment was made in order to contain and reduce inflation over the medium term. Inflation was high in 2007, with an annual CPI increase of 3 per cent in the December quarter and underlying measures around 3½ per cent. Domestic demand grew at rates appreciably higher than the growth of the economy’s productive capacity over the year. Labour market conditions remained strong into early 2008 and reports of high capacity usage and shortages of suitable labour persist. Inflation is likely to remain relatively high in the short term, and will probably rise further in year?ended terms, before moderating next year in response to slower growth in demand. The Board took account of events abroad and developments in financial markets. The world economy is slowing and it appears likely that global growth will be below trend in 2008. Recent trends in world commodity markets, however, have further strengthened prospects for Australia’s terms of trade. Sentiment in global financial markets remains fragile. Australian financial intermediaries are experiencing increases in funding costs, which are being passed on to customers. Some tightening in credit standards for more risky borrowers is occurring. There is tentative evidence that some moderation in household demand is beginning to occur, with business and consumer sentiment softer recently, and household credit demand slowing somewhat. The extent of that moderation is uncertain, however. As the Board noted last month, a significant slowing in demand from its pace of last year is likely to be necessary to reduce inflation over time. Having weighed both the international and domestic information available, the Board concluded that a further tightening in monetary policy was needed to secure an inflation rate of 2?3 per cent over time. As a result of this and earlier actions, and rises in borrowing costs which are occurring independently of changes in the cash rate, the overall tightening in financial conditions since the middle of 2007 is substantial. The Board will continue to evaluate prospects for economic activity and inflation in the light of new information. AustralianPolitics.com no