Zenith Finance Blog

Reserve Bank raises interest rate to 4.75 percent on Cup Day

In what’s become the only sure bet on Melbourne Cup Day, the Reserve Bank Board yesterday decided to increase the cash rate target from 4.5% to 4.75%.

The Board’s reasons being:

  • the global economy grew faster than trend over the year to mid 2010
  • turmoil in financial markets has abated
  • the Australian economy indicates growth around trend over the past year
  • the exchange rate has risen significantly
  • demand for labour has continued to firm
  • the economy is now subject to a large expansionary shock from the high terms of trade so there’s a risk of inflation rising again over the medium term.

Click here to read the complete Reserve Bank media release.

To find out how this might affect you and your finances please contact us any time on 1300 288 874.