interest rates increase 0.25, page-8

"US rates are dropping. That means the US dollar will drop, Aus dollar will rise. That makes various industries suffer (tourism, export, etc) and goes to the heart of our balance of trade. People start thinking a Merc is not much more expensive than a Ford etc.

The pressure will be on the RBA to fix it. Look to July 2008 to Dec 2008 and you will see the rates drop back significantly. Maybe a bit more pain util then but after that ..."

maybe.....but the NZ Reserve Bank has imposed high interest rates for many years to the detriment of exporters in an attempt to reign in property prices and keep a lid on inflation and the NZD has soared. No apparent consideration was given to the export sector and they suffered massive trade deficits even with record dairy prices...will the RBA act differently? depends how dogmatic they are about the precious inflation target or whether wider implications are taken into account.