Hi
The other side of the interest rate story is of course the Australian dollar. As an importer I’m affected by the dollar fluctuations [curently benefitting by higher Ozzy dollar], but exporters are suffering!!! and the higher the RBA puts interest rates, the more money is attracted to Oz, pushing dollar up etc, the result is exports become less competitive – the more out of whack the balance of trade goes – and this itself tends to major economic woes. So seems to me the RBA is caught between upping rates to cool the housing sector but by doing so decreasing exports and so on. In short I dont think rates are likely to rise as you suggest –
cheers
Kim
