The Reserve Bank looks ahead

When considering the shape of the economic climate in the months to come, it is vital to remember what has been done to prevent this crisis, the Reserve Bank of Australia’s (RBA’s) assistant governor Malcolm Edey has said.

In his assessment of the outlook for 2008, the Reserve Bank’s second in command said that actions to cut interest rates and pump money into the Australian economy had gone a long way to prevent a global financial collapse.

He noted that while the RBA has been busy making swathing interest rate cuts, its counterparts in other major economies have been taking similar measures, helping to steer the world away from disaster.

"Interest rates have been cut to low levels in most countries and there are
some very large fiscal policy initiatives in the pipeline around the world," he said.

His comments came after the RBA decided not to make an interest rate cut this month, a move which many interpreted as a statement of the strength of the Australian economy as a whole.ADNFCR-1761-ID-19059994-ADNFCR