Carr wrong on RBA rate

Comments on Adam Carr “SCOREBOARD: Easy on the hikes”, 21/10/2009, http://www.businessspectator.com.au/bs.nsf/Article/US-dollar-Australian-dollar-RBA-hikes-interest-rat-pd20091021-WZSN7?OpenDocument&src=sph

I think Carr is wrong on RBA interest rate this time.

The reasons include that the global economic meltdown is clearly over; there is no financial and economic emergency in Australia anymore; inflation is still above RBA's policy zone; and the current rate are clearly at emergency levels; changes in economic conditions mean the fiscal stimulus will have an upward pressure on inflation; so is a booming Chinese and Asian economies.

The concern over effects on currency is reasonable, but there is greater concern over the hosing bubbles re-emerging.

So RBA should move rapidly to lift the interest rate out of current emergency levels to normality. Any other actions will be irresponsible and wrong.

Carr should realise that.