Note to RBA - don't cut interest rates!

[Stormin_Norman]

more like the G2.

india and china.

 

[prawn_86]

my 2 cents worth....our banks borrow from the foreigners cause its cheaper than here...so why should australians be the only ones paying for high credit..and the rest of the world is zero ???

cause we are different ??? not

Kincella,

As i stated in one of the property threads this statement above is incorrect.

Even if banks did borrow from overseas (which they dont actually do much of as far as im aware), they would need to borrow in the countries currency to take advantage of the IR. Then they would need to convert it to AUD. FOrex markets take this into account (its called interest rate differential) and arb any difference that comes up, so its not possible to make a profit from it.

So the crux of it is: banks cant borrow in their home currency at a lower rate from overseas.

 

[Aussiejeff]

more like the G2.

india and china.

I'm beginning to warm to the idea of a G-Whizz Forum.

 

[Uncle Festivus]

Robert Gottliebsen thinks so too?

You could almost feel a sigh of relief from Australia’s small business community that the Reserve Bank did not lower interest rates again.

..........................

There is no doubt that the early interest rate cuts did stimulate the economy but they now have much less impact, except to people who have no concerns about job security.

http://www.businessspectator.com.au...-PS6MH?OpenDocument&src=kgb&alerts&loc=center

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