Contrary to an earlier post made on interest rates, the Reserve Bank is now sending a strong hint that interest rates have probably peaked, and that the next move could be down. This is certainly welcome news to many Australians who have been feeling the recent pressure of successive interest rate rises.
According to the governor of the Reserve Bank, Glen Stevens, “We have the biggest terms of trade boom in 50 years, at the same time as we have one of the most serious malfunctions in developed country capital markets in a long time.”
Mr. Stevens also said “the demand for credit by households has been weakening over recent months. Measures of confidence have declined. While those measures can provide false signals, our assessment is that a change is occurring, and we are hearing that from businesses that we talk to.”
Read the full article from The Age, Saturday 5 April, 2008.
Check out the Reserve Bank of Australia website for more information on monetary policy.