Australia raises rates to 4.5%

by Richard Kilner

Story link: Australia raises rates to 4.5%

The Reserve Bank of Australia has elected to once again increase the Australian interest rate by 25 basis points, raising it to 4.5%.

In recent months Australia’s central bank has increased rates regularly, with the interest rate up by 150 basis points since September 2009.

Governor Glenn Stevens has stated that growth forecasts have been improved once more, with predictions now suggesting the country will see growth at or above trend growth levels this year.

However, Stevens warned that growth remains fragile in Europe, but is a little better in North America and is strong in Asia.

On a global basis the financial markets are functioning better than they were a year ago, but the crisis in Greece is a cause for some concern.

The Board of the Reserve Bank of Australia will continue to set rates with a view to achieving inflaton of 2-3%.