February 04, 2010

Central Bank of Australia shocked the financial world.

Key interest rate the Central Bank of Australia, against all expectations, was kept unchanged, and the bank took a break to assess the economic situation. The head of the National Reserve Bank Glenn Stevens said that the cost of borrowing will remain at around 3.75%, while projected all the experts who participated in the survey, Bloomberg, the rate would rise by a quarter percentage point. But Stevens argued the ruling is that in the coming months there is a need to make time out to assess the economic impact of previous steps that have taken the financial authorities of the country. Probably played a role and the fact that, according to the latest information, the index of business confidence in December fell to the lowest point in six months. "This is the best time to take a break and assess what effect did the first three steps to increase interest rates", - commented Stephen Roberts, head of economic department of the Sydney consulting firm Nomura. He believes that to increase interest rates in the future should be only when the Central Bank will be received conclusive evidence that the economic recovery is rapid. Australian Reserve Bank has become the world's first central bank, which raised borrowing costs three times over the past year. Global recession, in fact, did not affect the "green continent" in connection with the measures that the Government had to allocate twenty billion Australian dollars (eighteen billion U.S. dollars) to support consumers and even twenty-two billion U.S. dollars for infrastructure - railways, transport and schools. Back to news list