The unexpected decision of the President of the Australian central bank's Glenn Stevens (Glenn Stevens) to keep interest rates unchanged gives the Australian economy a chance to compensate for a series of interest rate hikes and allow other countries to catch up with her.
"Being the only country to raise interest rates - this is a problem, especially if the higher exchange rate is strangling some sectors of the economy", - said Matthew Johnson (Matthew Johnson), interest rate strategist at UBS AG in Sydney.
Yesterday in Sydney the policy of the target overnight rate at around 3.75%, denying thereby forecasts Bloomberg surveyed 20 economists, who expected a quarter point increase and the movement of the national currency to the lowest level in 6 weeks. Growing up in the past year by 28% against the U.S. dollar OSSI eroded earnings of exporters, including BlueScope Steel Ltd., After Stevens was the sole banker of large groups of twenties, raised interest rates thrice.
The Australian dollar was the universal favorite currency in the past year, when investors returned to high-risk operations ", - said Mansoor Mohi-Uddin (Mansoor Mohi-uddin), Singapore chief currency strategist at UBS AG. "Now, since the Central Bank clearly changed the short-term investors, long time working with the Australian dollar, for some time will fix the profit."
Last year's increase in interest rates in Australia has helped the growth of the national currency, as investors sought higher-yielding assets in so-called operations, Kerry trade, which the assistant chairman of the Reserve Bank, Guy Debelle (Guy Debelle), called at the end of last year, back to the old fashion ".
Reducing currency
The national currency fell yesterday to a level lower than the 87.81 U.S. cents per Australian dollar, which was the lowest level since Dec. 23 when he was worth 89.24 cents just before it was announced about the decision.
Traders give a 28% chance of raising interest rates a quarter point on March 2, when the next meeting of the Bank. According to Bloomberg calculations based on the interbank futures Sydney Futures Exchange at 12:46. Before yesterday's decision, the chances were equal to 100%.
The decision to maintain the previous interest rate at the first meeting of the central bank since the last meeting on December 1, allowed politicians to judge the impact of past interest rate hikes on consumers and businesses, "said Stevens.
The decision to pause was taken as evidence against global credit conditions "remain difficult in the major economies due to the fact that banks continue to face credit losses related to the period of economic weakness," - he said. "Fears of some States have only increased."
Global rate
Investors are worried that the deficit byudezhta Greece, but it the largest in the EU, will be distributed to other countries in the region, which has already caused a sharp drop in euro on 5,1% against the yen, and falling by 2,7% against the dollar in the year.
Concerns about the pace of global growth also increased speculation that central banks in the U.S. and Europe are unlikely to raise interest rates soon.
Interest rates are "adequate," said ECB president Jean-Claude Trichet (Jean-Claude Trichet said) on Jan. 14, after leaving them at a record low of 1%. The Fed last week confirmed its intention to keep interest rates "close to zero" during the "prolonged period", saying that "the pace of economic recovery will be moderate for some time."
On the other hand, Australia's economy shows signs of increase since last year's bottom of world recession, launched 20 billion Australian dollars ($ 18 billion) issued to consumers, Prime Minister Kevin Rudd (Kevin Rudd).
Time to make up
135.700 Employers added jobs in the period between September and December, which was the largest increase in the level of employment by more than 3 years, lowering the unemployment rate to an eight-month low of 5,5%.
The economy grew for 3 months to September, showing growth in the third consecutive quarter, house prices rose by 13,6% in 2009.
Stevens and his board were concerned that such events only in Australia, "said Joshua Williamson (Joshua Williamson), a senior economist at Citigroup Inc in Sydney. The decision to keep interest rates at the same level "also gives some other central banks to catch up with us, or at least let them know that they are moving to a rise in interest rates."
Approximately 35% of income for Australian exporters in the respective shares, such as Foster's Group Ltd., World's second largest winemaker, steel company, BlueScope Steel, suffered from the growth against the U.S. dollar, suggesting Pidkok Chris (Chris Pidcock), strategist at Goldman Sachs JBWere Pty.
Raised interest rates and a strong Australian dollar cause a drop in business confidence in December to its lowest level in 6 months, said in yesterday's review of National Australia Bank Ltd.
Trade deficit
Australia's trade deficit widened in December, as imports of goods, including gasoline, grew up in for nearly two years, as is evident from today's report. The deficit increased to 2.25 billion Australian dollars, instead of 1.73 billion in November.
There is also evidence that higher interest rates Stevens in October, November and December, limited the mortgage market.
Loans for housing purchase fell to a five-year low last month, according to a recent report by Australian Finance Group Ltd., Which assures that owns almost 10% of the mortgage market. Group has issued 1.55 billion Australian dollars of mortgage loans in January, which is 19% less than a year ago and this is the lowest for any month since 2005.
Most mortgage rates in the economy increased by almost 1 percentage point since October, outpacing the growth of the Central Bank on 75 bizisnyh points on the estimated rate, Stevens said yesterday.
Mortgage costs
Australian & New Zealand Bank Group Ltd. increased their variable interest rates by 35 basis points, after Stevens raised the overnight target rate by 25 basis points on December 1. Commonwealth Bank of Australia lifted the rate on domestic borrowing by 37 basis points, Westpac Banking Corp. showed the most significant growth, increasing mortgage rates by 45 basis points.
Stir in Westpac means that households taking out a mortgage to A $ 300,000 shall be charged an additional A $ 1,008 per year, rather than A $ 576, which would have taken if the bank simply followed the rise in rates of the Reserve Bank.
"Higher interest rates negatively affect consumers in the long run," said in an interview last week, Michael Lyuskomb (Michael Luscombe), CEO of the largest Australian retailer Woolworths Ltd. "I think 2010 will be challenging.
"Households will welcome this decision, and the business it will also make", - said yesterday the Parliament Canberra klava Treasury Vine Swann (Wayne Swan).
"Being the only country to raise interest rates - this is a problem, especially if the higher exchange rate is strangling some sectors of the economy", - said Matthew Johnson (Matthew Johnson), interest rate strategist at UBS AG in Sydney.
Yesterday in Sydney the policy of the target overnight rate at around 3.75%, denying thereby forecasts Bloomberg surveyed 20 economists, who expected a quarter point increase and the movement of the national currency to the lowest level in 6 weeks. Growing up in the past year by 28% against the U.S. dollar OSSI eroded earnings of exporters, including BlueScope Steel Ltd., After Stevens was the sole banker of large groups of twenties, raised interest rates thrice.
The Australian dollar was the universal favorite currency in the past year, when investors returned to high-risk operations ", - said Mansoor Mohi-Uddin (Mansoor Mohi-uddin), Singapore chief currency strategist at UBS AG. "Now, since the Central Bank clearly changed the short-term investors, long time working with the Australian dollar, for some time will fix the profit."
Last year's increase in interest rates in Australia has helped the growth of the national currency, as investors sought higher-yielding assets in so-called operations, Kerry trade, which the assistant chairman of the Reserve Bank, Guy Debelle (Guy Debelle), called at the end of last year, back to the old fashion ".
Reducing currency
The national currency fell yesterday to a level lower than the 87.81 U.S. cents per Australian dollar, which was the lowest level since Dec. 23 when he was worth 89.24 cents just before it was announced about the decision.
Traders give a 28% chance of raising interest rates a quarter point on March 2, when the next meeting of the Bank. According to Bloomberg calculations based on the interbank futures Sydney Futures Exchange at 12:46. Before yesterday's decision, the chances were equal to 100%.
The decision to maintain the previous interest rate at the first meeting of the central bank since the last meeting on December 1, allowed politicians to judge the impact of past interest rate hikes on consumers and businesses, "said Stevens.
The decision to pause was taken as evidence against global credit conditions "remain difficult in the major economies due to the fact that banks continue to face credit losses related to the period of economic weakness," - he said. "Fears of some States have only increased."
Global rate
Investors are worried that the deficit byudezhta Greece, but it the largest in the EU, will be distributed to other countries in the region, which has already caused a sharp drop in euro on 5,1% against the yen, and falling by 2,7% against the dollar in the year.
Concerns about the pace of global growth also increased speculation that central banks in the U.S. and Europe are unlikely to raise interest rates soon.
Interest rates are "adequate," said ECB president Jean-Claude Trichet (Jean-Claude Trichet said) on Jan. 14, after leaving them at a record low of 1%. The Fed last week confirmed its intention to keep interest rates "close to zero" during the "prolonged period", saying that "the pace of economic recovery will be moderate for some time."
On the other hand, Australia's economy shows signs of increase since last year's bottom of world recession, launched 20 billion Australian dollars ($ 18 billion) issued to consumers, Prime Minister Kevin Rudd (Kevin Rudd).
Time to make up
135.700 Employers added jobs in the period between September and December, which was the largest increase in the level of employment by more than 3 years, lowering the unemployment rate to an eight-month low of 5,5%.
The economy grew for 3 months to September, showing growth in the third consecutive quarter, house prices rose by 13,6% in 2009.
Stevens and his board were concerned that such events only in Australia, "said Joshua Williamson (Joshua Williamson), a senior economist at Citigroup Inc in Sydney. The decision to keep interest rates at the same level "also gives some other central banks to catch up with us, or at least let them know that they are moving to a rise in interest rates."
Approximately 35% of income for Australian exporters in the respective shares, such as Foster's Group Ltd., World's second largest winemaker, steel company, BlueScope Steel, suffered from the growth against the U.S. dollar, suggesting Pidkok Chris (Chris Pidcock), strategist at Goldman Sachs JBWere Pty.
Raised interest rates and a strong Australian dollar cause a drop in business confidence in December to its lowest level in 6 months, said in yesterday's review of National Australia Bank Ltd.
Trade deficit
Australia's trade deficit widened in December, as imports of goods, including gasoline, grew up in for nearly two years, as is evident from today's report. The deficit increased to 2.25 billion Australian dollars, instead of 1.73 billion in November.
There is also evidence that higher interest rates Stevens in October, November and December, limited the mortgage market.
Loans for housing purchase fell to a five-year low last month, according to a recent report by Australian Finance Group Ltd., Which assures that owns almost 10% of the mortgage market. Group has issued 1.55 billion Australian dollars of mortgage loans in January, which is 19% less than a year ago and this is the lowest for any month since 2005.
Most mortgage rates in the economy increased by almost 1 percentage point since October, outpacing the growth of the Central Bank on 75 bizisnyh points on the estimated rate, Stevens said yesterday.
Mortgage costs
Australian & New Zealand Bank Group Ltd. increased their variable interest rates by 35 basis points, after Stevens raised the overnight target rate by 25 basis points on December 1. Commonwealth Bank of Australia lifted the rate on domestic borrowing by 37 basis points, Westpac Banking Corp. showed the most significant growth, increasing mortgage rates by 45 basis points.
Stir in Westpac means that households taking out a mortgage to A $ 300,000 shall be charged an additional A $ 1,008 per year, rather than A $ 576, which would have taken if the bank simply followed the rise in rates of the Reserve Bank.
"Higher interest rates negatively affect consumers in the long run," said in an interview last week, Michael Lyuskomb (Michael Luscombe), CEO of the largest Australian retailer Woolworths Ltd. "I think 2010 will be challenging.
"Households will welcome this decision, and the business it will also make", - said yesterday the Parliament Canberra klava Treasury Vine Swann (Wayne Swan).
Bloomberg
February 3
February 3
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