Reserve Bank treads fine line on interest decision
The Reserve Bank is set to walk a fine line between controlling inflation and hastening economic slowdown when it releases its monetary policy statement on Thursday.
Tuesday, June 7th 2005, 9:02AM
by The Landlord
Economists expect the bank to leave its official rate unchanged at an already high 6.75 per cent.After seven increases over the past year, which have coincided with a strong dollar, the bank is already standing on the economy’s brakes.
But economists do not expect the high currency/high interest rate environment to result in a "hard landing" for the economy.
They say the central bank will be anxious not to give the markets any hint that it may now be thinking "enough is enough", as that may lead to lower, market-led rates.
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