Interest rates likely to remain steady in 2011, says NAB chief

The Reserve Bank of Australia is unlikely to hike interest rates during 2011, according to the chief executive of National Australia Bank (NAB).

Cameron Clyne told an Australia Israel Chamber of Commerce lunch that raising rates may stimulate demand but warned that it could prompt more Aussies to put money into savings accounts, reports the Australian.

At the moment the cash rate is at the 4.75 per cent level set in November 2010.

According to Mr Clyne, a cut to interest rates could lead to greater spending, but he suggested that the danger was that it would be interpreted as a sign that the economy was weak.

"I think at the moment, because there is so much data on both cases, we're in a wait-and-see mode and probably through the end of the year we'll see fairly stable [rates]," the expert stated.

He concluded by saying that Aussies' desire to save money is unlikely to alter in the near future.

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