The Reserve Bank of Australia, it is likely that tomorrow will keep its benchmark interest rate unchanged as previous increases slow the economy and reduce the risk of accelerating inflation.
Governor Glenn Stevens and his board will leave the cash target interbank rate at 4.75 percent in morning Sydney, according to 25 economists surveyed by us. Stevens told lawmakers in the 10 days of testimony that "it is unlikely that any of us coming" in borrowing costs.
Australia's economy probably will not reach the central bank predicts growth of 3.5 percent in 2010 after it expanded last quarter at the slowest pace in almost two years, according to Citigroup Inc. in order to contain prices Stevens was favored by some of the largest banks raise mortgage rates by nearly double the increase of a quarter percentage point of the RBA on 2 November.
"With rates in November, inflation under control and boost the economy losing in the fourth quarter, clearly not the time to raise rates further," said Craig James, chief economist at Commonwealth Bank of Australia in Sydney.
Traders bet there's a 90 percent chance Stevens left unchanged borrowing costs during the first quarter of next इयर.
The currency fell 2.9 percent against the U.S. dollar last month as reports indicate a slowdown in the economy.
Household expenditure
Retail sales fell in October by the most since July 2009, according to data released last week, and a private report showed consumer confidence fell in November to a minimum of five months. Household sector spending almost half of gross domestic product of the nation.
Business profits also fell in the three months through September, the first quarterly drop in more than a year. Loans to businesses fell 0.8 percent in October from September, according to central bank.
The economy grew 0.2 percent in the third quarter of the previous period, the worst performance since a contraction in late 2008, a government report released on 1 December.
Stevens, in testimony before the House of Representatives Economics Committee on 26 November, said that while the decision last month to raise rates was finely balanced, it is usually better to go earlier rather than later.
"We have to balance that risk, obviously, against the risk of getting behind the game and history, for many central banks including us, which has tended to be the mistake we made," the governor told lawmakers.
Dollar parity
Australia's currency reached parity with the U.S. dollar in October as traders bet the central bank will increase borrowing costs and the Federal Reserve prepared to pump an additional incentive in the world's largest economy. The RBA is trying to contain the expected acceleration in inflation as Australia experienced a boom in investment of resources that is driving companies to increase hiring to meet demand from China.
Australia's employers probably added 20,000 workers in November, the ninth straight month of gains, according to a separate survey before a report of 09 December. Employers have added 301,600 jobs from January to October and the average monthly gain this year is the largest in at least three decades.
Fortescue Metals Group Ltd., the third largest producer of iron ore Australia, last month approved an expansion of $ 8.4 billion in the Pilbara region of Western Australia out of almost triple the earnings claim steel manufacturers.
China Mills
He joins Rio Tinto, Vale and BHP Billiton SA Ltd., to announce the expansion as prices rise. The producers are trying to meet the demand from steel mills in China, where consumption is forecast alloy Rio Tinto to double by 2020 from 2008 levels.
"In all the available evidence, we are witnessing an event that occurs maybe once or twice in a century," Stevens said in an address to a Committee for Economic Development Australia event in Melbourne last week. "Obviously we have to be careful of overheating."
increased by a quarter point The RBA last month was followed by large increases in the level of variable rate home loan from Westpac Banking Corp., National Australia Bank Ltd., Australia and New Zealand Banking Group Ltd. and Bank of the Commonwealth.
That sparked a political backlash and the government moves to increase competition in the banking sector. Local politicians are sensitive to increases in borrowing costs in more than 90 percent of borrowers in Australia have variable rate loans to home.
The RBA is unlikely to raise rates again before the second quarter of 2011 when the economy is "yet to see the effect of the recent tightening of rates and mortgage rose 40 basis points," said Paul Bloxham economist Head of Australia and New Zealand in HSBC Holdings Plc in Sydney and a former RBA official, who had predicted an improvement in the first quarter.
"The decision this month is almost a fait accompli," he said. The next RBA monetary policy meeting on 1 February.
0 comments:
Post a Comment