Interest Rate Increases Down Under on Hold for Now
Australian Treasurer Ralph Willis signaled that further interest rate rises are on hold until the effects of last year’s three rises are clear, the Sydney Morning Herald reported Wednesday.
He also signaled a belief that last year’s increases slowed the economy, possibly reducing the need for large cuts in the budget deficit. Willis said the budget for the financial year beginning July 1 will emphasize incentives to make people save more. That could include compulsory worker contributions to pension funds and changes in the way interest on savings accounts is taxed.
The government is scheduled to unveil its new budget May 9. It is under pressure to reduce a large deficit.
Meanwhile, the Australian dollar gained Wednesday amid a rise in the prices of base metals, one of Australia’s chief exports.
The Australian dollar was last quoted at 74.76 U.S. cents, up from 74.62 cents late Tuesday in New York.
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