Role of Reserve Bank of Australia and Interest Rates

Definition of Interest Rate An interest rate is the percentage yield on a financial security or asset such as a loan, bond or savings deposit. A variety of interest rates exist in the economy because of differences in the risk, liquidity and maturity of various financial instruments or assets. Different Types Interest Rates (% per annum) Bank Current Deposit (at call) - 0.00%, June 2005 Cash Rate Target - 5.50% (+0.25%), 2nd March 2005 Banks Fixed Deposit Rate $5000 to $100,000 (5 years) - 4.75%, …showed first 75 words of 1915 total…

…showed last 75 words of 1915 total…previous cycle experience, it would be surprising if interest rates did not have to increase further at some stage of the current expansion. Nonetheless, given the tentative signs of easing in domestic demand pressures, the [Reserve Bank] Board judged that there was a case to hold the cash rate steady for the time being, to allow further time to assess the strength of inflationary expectations." - Statement on Monetary Policy Reserve Bank of Australia 4 May, 2005