Reserve Bank decision welcomed by business
Posted 02/02/2010
Reserve Bank decision welcomed by business
The Bendigo Business Council welcomes today's decision by the Reserve Bank of Australia to keep its reference interest rate on hold.
Executive Officer Kevin de Vries said "The Reserve Bank's decisions today and over the past months signals that while the economy is recovering, economic conditions remain challenging in some sectors and regions. In emerging from an economic trough the last thing that businesses need is to be hit with additional costs from premature interest rate rises."
"Escalating house prices in Melbourne or Sydney should not be used as a barometer of the financial health of businesses. Recent economic growth in Australia has been influenced by Government measures and the low interest rate environment. It is critical that this support for our economy does not stop abruptly." Mr de Vries said.
"While orders are picking up among some manufacturers and confidence is returning in the professional services sector, other sectors such as hospitality are patchy and it is a difficult environment for smaller retailers. Businesses dependent on discretionary spending continue to find the going tough."
"The Reserve Bank's announcement particularly recognises the difficult credit conditions faced by smaller businesses, hit both by tighter lending standards from banks and interest rate rises above those of the RBA cash rate.
While interest rates are likely to rise in future months, today's announcement will provide a little breather for businesses as they recover from the challenging trading circumstances of the past two years."
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