- Likely future direction of interest rates in Australia –
Due to the present reduction in the financial market, its conditions and the ridiculously high petrol prices it has resulted in the slowing in domestic demand and thus preventing the Reserve Bank of Australia of lowering the currently high and raising interest rates.
In the immediate future I do not believe that the interest rates will increase much because of the reasonably steady trend in today’s market and as it continues to increase.
In the graph (left) it is an overview of duration between 1990 and 2008. The Australian Cash Rate has remained steady between the years of 2004 and 2008, increasing slightly with incremental increases at the far right end of the chart. In comparison to the Japanese Target Call Rate and the US Federal Funds Target over the past 18 years the Australian cash rate has remained predominately higher than the Japanese target call rate and remained practically on par with the US Federal funds target rate, only exceeding it in the earlier years.