If rates go up locally too much now it will further strengthen our $, the more the overseas cash comes in the higher our $ will go.
This will ultimately hurt our exports, which at the moment is the basis of our strong economy, as the majority of goods sold overseas are paid in $US. Ie., Au, gas, iron ore, coal, primary produce ....just to name a few.
Then as we become uncompetitive in the global markets, business suffers, unemployment grows bad debts increase etc etc.
Viscious cycle.
My view is rates will stay where they are. .. don't cut of the hand that feeds you.
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- Why interest rates should not rise
Why interest rates should not rise, page-11
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