Interest rates rise to 3.5 percent

Reserve Bank decides to lift interest rates again due to the continued improvement of the Australian economy

November 3, 2009

The Reserve Bank has opted to raise interest rates by 25 basis points to 3.5 percent.

Speaking after today’s board meeting in Sydney, Reserve Bank Governor Glenn Stevens says the return to growth in the global economy as well as strong growth in China was behind the RBA's decision.

"The global economy has resumed growth. With economic policy settings likely to remain expansionary for some time, the recovery is likely to continue during 2010 and forecasts have been revised higher," Stevens says.

"The expansion is generally expected to be modest in the major countries, due to the continuing legacy of the financial crisis."

He says prospects for Australia's Asian trading partners has improved, while growth in China has been strong, in turn having a significant impact on other economies in the region and commodity markets.

"For Australia’s trading partner group, growth in 2010 is likely to be close to trend," Stevens says

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