Stevens says rates are going to keep going up

06/11/2009

RBA governor Glenn Stevens used a speech last night to reinforce the merit of the approach to monetary and fiscal policy over two decades and attendant shifts in banking regulation and corporate governance standards.

“Even so, it is not too early to think about issues of a medium-term nature. The key question is: having had a fairly shallow downturn, how do we make the upswing long and stable, and relatively free of serious imbalances?

“At least part of the answer is that we will need to re-invest in the same policy discipline, and the same careful private-sector management, that paid dividends in the recent episode. That means keeping tested frameworks in place, amended as necessary in the light of experience.”

One of those “disciplines”, Stevens made clear, would be to keep pushing the cash rate up, though he was careful to not leave any fresh clues on timing.

“It means unwinding temporary measures as appropriate. It means keeping a focus on flexibility.

“And perhaps most of all, it means resisting the temptation to assume prosperity is easily achieved, or easily managed.”

Source: The Sheet

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