Australian Premier Denies Lower Interest Rates

Australian Prime Minister Paul Keating said in a radio interview last week that the nation’s interest rates won’t be lowered further “for the moment.”

The prime minister noted that the government lowered cash rates one percentage point Jan. 8, and that short-term interest rates “are down a long way” from when the government began loosening monetary policy at the start of 1990.

Australia is in the midst of its worst economic recession in more than two decades. Unemployment rose in December to the highest rate in 26 years, according to statistics released recently, and the government conceded that more had to be done to create jobs.

The rise, from 10.5% in November, was within market forecasts but the highest since records began in 1966.

The government and private economists expect the labor market to deteriorate further before Australia gradually grinds its way out recession.

The record unemployment rate is a major political hurdle facing Keating in his struggle to win over voters before the next election, due by May, 1993.