why blame the rba?, page-13

Grant62,

My understanding of economics is basic but it seems that you agree with my earlier statement that the recent rise was the wrong move.

I never thought about the point about the RBA leading the way and am a little concerned now that you've pointed out how many others did not. That's going to put even more upward pressure on our dollar.

It seems clear to me that they've jumped the gun and one can only hope that pressure from just about everyone in the country (including Costello and Howard) will get them to pull their heads in.

Are they really concerned about a property bubble or is there some advantage to the banking sector in rate rises? These blokes after all are bankers and would have strong ties to the big banks.

If I recall correctly banks prefer base rates to be a little higher as it gives them a bit more leeway to make a margin between the base rate and the retail rate.

- Z