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Interest Rate Comparison

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Introduction

In the past Australia has had turbulent interest rate increases and decreases but this has not always been reflected by external markets. Australia In 1990 - 1994 Aust suffered a rapid decrease in the cash rate going from approx 17.00% to 6.00%. From 1995 - 1996 Aust experienced a steady rate followed by a quick, short decrease from 1996 - 1998. 1990-17.00% 1995-7.50% 2000-5.00% 2005-5.25% Present-7.25% United States In 1990 - 1993 the US experienced a decrease in interest rates from approx 8.25% to 3.25%. frm 1993 - 1994 the US continued on a steady rate of approx 3.25% followed by an increase in 1994 - 1996. In 2001 - 2003 the economy experienced a fast decrease followed by a steady rate of 0% in 2004. ...read more.

Middle

If a decrease in interest rates happens it will take approx 2 months to show an effect taking into account lag time. ------------------------------------------------------------------------------------------------------------ Australia's interest rate has decreased dramatically since it's peak of 17.00% in 1990. Today's interest rate sits at 7.25% and has remained constant since the begining of 2008, this is a 0.50% increase since last years rate and a 3% increase of it's 4.25% downfall in 2002. Future expectations show the cash rate may continue further at 7.25% but is experiencing a gradual increase and should reveal this in late 2008-early 2009 if inflation continues as it is. Australia's interest rate sits at 7.25% and has been consistent since the beggining of this year. ...read more.

Conclusion

Australia's interest rate was largest in 1990, sitting at 17%. Over the course of 4 years the interest rate dropped to 4.75%, but then in late 1994 rose back up to 5.50%-6.50% and continue to rise for the next 2 & a half years. Today the interest rate sits at a steady 7.25%. The interest rates don't look like rising anytime soon, although in the future we may see a small rise, if inflation keeps going the way it is. Australia's interest rates are quite high compared to those of Japan. In 1990 Japan had an interest rate of 4.25%, which over the course of 5 years steadily decreased to 1.75% in 1995. Over the next 10 years, Japans interest rate continued to drop, and was at an amazing 0.00% in 2000, and remained this until 2005. Currently, Japan has an interest rate of 0.50%. ...read more.

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