rates are up (1 Viewer)

[Newbie]

im sure everyone knows but yeah just in case

now all i gotta do is stop getting used to writing 4.75 in my essays

 

[scut]

Yep, 5% is alot easier to write than 4.75%

 

[timmii]

ah u guys are lucky - now when they ask you about australian policy you have a clearcut example/evidence of where policy is headed. yay!

haha my family is so weird, my dad rang from work and woke me up at about 10:15 today just to let me know the rates were raised

 

[Nick]

well it is big news..

is ur dad an importer by any chance?

im confused about one thing tho..

interest rates rise, therefore dollar should go up due to increased capital inflow..

so dollar goes up, benefits importers as demand for imports increases..

but, a more contractionary monetary policy stance will reduce aggregate demand.. so lessen the demand for imports..


are importers happy or not?

 

[-=«MÄLÅÇhïtÊ»=-]

wat exactly do you mean by "importers"? can u explain how 'importers' will be happy? I dont see it ><"

interest rates will only slightly affect dollar. it cant compare on the same scale as what it does to domestic demand

 

[timmii]

Lol nope! I think he's just excited he has a daughter who understands a little bit about economics

 

[timmii]

Importers will be happy because of the capital inflow that accompanies a rate rise (or to be more exact - an increase in the interest rate differential between australia and the rest of the world). This means that the aus dollar will appreciate (as if did this morning) which will thus lower the cost of imports and make them more competitive with domestic produce.

An appreciation is in the short term - whilst monetary policy probably takes 8-18months to work its way into the system and dampen AD. So importers are probs happier at the moment - especially since 25 basis points is more symbolic than anything else. Consumer confidence is high and it probs will take more than a small i.r's rise to really make too large a dent in import spending, so i'd suggest that importers are probs not too perturbed. Depends what they import of course

 

[Minai]

Yeah, I dont think this rate rise will have too much effect on consumption and investment - I doubt it will have much effect on aggregate demand and growth, since noone will start rushing to the bank and placing their money in interest bearing funds..

 

[LaZy_KoReAn]

Gaww, i hate remembering stats

 

[2late]

Originally posted by LaZy_KoReAn
Gaww, i hate remembering stats

And there's bout a bazillion to remember in economics... Stupid numbers... Very stupid economics...

Should start a thread with all the recent stats that we need to know... *hint hint* someone who knows their stats....

 

[Nick]

Originally posted by Minai
Yeah, I dont think this rate rise will have too much effect on consumption and investment - I doubt it will have much effect on aggregate demand and growth, since noone will start rushing to the bank and placing their money in interest bearing funds..

but us Australians looooove to save..

 

[2late]

Originally posted by Nick
but us Australians looooove to save..

so much so that the household saving is -1.3%

 

[2003HSC]

someone told me this yesterday, can someone else verify it?

since rates went up .25%, the dollar rose about 1 cent from 70- something to about 71-something. So the effect of rates has an
immediate impact on the dollar through attracting higher investment in australia.

 

[Nick]

no.. its had an immediate impact in speculative trade on the dollar..

95% of currency movements of the AUD is speculation and currency trading,

it will probly go up and down randomly now, depending on share market, OS figures an shit..