NSW premier urges RBA to avoid interest rates increase

The Reserve Bank of Australia (RBA) has been urged by New South Wales (NSW) premier Barry O'Farrell to resist the temptation to hike interest rates.

He asserted that the economy in the state is already "struggling" and said an increase to the cash rate would only exacerbate the situation.

"Many householders are already [finding] it tough because of the higher cost of living pressures," he stated.

The premier added that this is the wrong time for the central bank to impose additional costs on families and said an increase in interest rates is "the last thing we need now".

Mr O'Farrell noted that reducing the discretionary spending power of consumers in NSW would hamper efforts to put the region's economy back on course.

The board of the RBA is set to meet tomorrow to establish whether or not to raise the cash rate from its current level of 4.75 per cent.

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