Experts expect RBA interest rate rise

By Mozo ·

Experts predict that the Reserve Bank of Australia (RBA) will increase the interest rate by 25 basis points this week.

A survey conducted by AAP found that 13 out of 14 economists questioned think the central bank will implement another rise for the third consecutive month.

Commenting, senior economist at Commonwealth Bank Michael Workman said the Aussie economy is performing better than other western countries.

He explained the current level may be too low given the low impact of the global recession on Australia.

"The cash rate at 3.5 per cent is way too expansionary on an economy that won’t experience the worst outcomes [of the global financial crisis]," Mr Workman remarked.

Last week, RBA deputy governor Ric Battellino commented on recent improvements in the economy, which led many commentators to believe there would be a rate rise this week.

He said the country’s finances had entered a "new upswing" and that further growth is expected, the Herald Sun reports.

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