RBA sets the scene for a rate hike


RBA Board minutes; ABARE Australian Commodities; Airfares

  • Minutes of the last Reserve Bank Board meeting echo’s the sentiments of the Governors speech yesterday and adds further weight to the likelihood of an interest rate hike.
  • Board members remained quite comfortable with current interest rate settings, however “observed that previous investment booms and increases in the terms of trade had posed significant challenges for economic policy and that high levels of resource utilisation was likely to put pressure on inflation”.
  • The Australian Government’s chief commodity forecaster, ABARE, expects commodity export receipts to rise by 26 per cent in 2010/11 to a record $215 billion in 2010/11. The surge in exports can be largely attributed to the higher coal and iron ore volumes. The latest forecast on commodity exports is 6.1 per cent higher than the estimate made three months ago.
  • Australians are travelling more, especially on key business routes like Melbourne-Sydney, and the key message is to shop around for the best deals because airfares are creeping higher. All but discount airfares are now higher than a year ago according to latest data from the Bureau of Infrastructure, Transport and Regional Economics.

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