No case for interest rate hikes in Australia, RBA's Harper says

Alexander Bueso WebFG News | 13 Sep, 2017 13:13 - Updated: 13:13 | | |

Australia flag

AUD/USD

0.76

07:59 23/11/17
-0.11%
-0.00
  • 1.75
  • -0.13%-0.00
  • Max: 1.75
  • Min: 1.75
  • Volume: n/a
  • MM 200 : n/a
08:25 23/11/17

Excess capacity in the Australian economy means that interest rate hikes are not justified and there is nothing the Reserve Bank can do to stymie the drop in the US dollar, one of the country's top rate-setters said.

In an interview with Bloomberg, Reserve Bank of Australia board member Ian Harper pointed to unchanged measures of so-called underemployment and slow wage growth to back up his case for the former.

So despite what he described as "terrific" growth in full-time employment, Harper added: "So long as that is the case, why would anyone be suggesting tightening monetary policy when the economy is operating below potential: I mean hello?"

He also said there was little RBA could do to brake strength in the Aussie's value because it was being driven by weakness in the Greenback.

"If you're propsoing that there's some council of intervention here, what are you going to do, try and influence the US dollar? Give me break," he said.

Harper, one of six independent directors on the committee, also appeared to indicate he was satisfied with the effect of recent curbs on home lending by investors in shunting capital back towards potential home owners.

More news

00:20 US close: Wall Street mixed ahead of Thanksgiving holiday

Wall Street finished mixed on Wednesday, following the record highs set the day before and amid lighter-than-usual trading volumes ahead of the Thanksgiving holiday on Thursday.

22 Nov Jefferies upgrades Kingfisher to 'buy', raises target price

Analysts at Jefferies upgraded home improvement products retailer Kingfisher (KGF) to 'buy' from its previous 'hold' rating on Wednesday, raising its target price from 310p to 400p along the way.

22 Nov Europe close: German stocks give back gains amid political impasse

Stocks ended the session modestly lower as traders waited for the release of the minutes of the US Federal Reserve's last rate-setting meeting in the evening and monitored the news-flow out of Germany, amid speculation that a 'grand coalition' between Germany's two main political parties, the centre-right CDU/CSU and the Socialist SPD, may yet be possible.

22 Nov Lebanon prime minister Hariri retracts resignation

Saad al-Hariri has revoked his resignation as Lebanon's prime minister, according to a local news report on Wednesday.

22 Nov Budget: Planning probe spooks builders, mixed reaction for stamp duty cut

A range of new housing policies were proposed by Chancellor Philip Hammond in his Budget statement, including more funds for smaller housebuilder, a probe into potential holding of land by major housebuilders and a stamp duty cut for first-time buyers.

22 Nov US open: Shares hold ground ahead of FOMC minutes

Wall Street is holding its ground following the record highs set the day before, albeit amid lighter than usual trading volumes ahead of the Thanksgiving Holiday on Thursday, with investors looking to the release of the minutes of the most recent meeting of the Federal Open Market Committee.

22 Nov London close: Stocks higher on UK budget

Shares closed higher on Wednesday as investors sifted through corporate releases as well as the Autumn Budget.

22 Nov FTSE 250 movers: Qinetiq boosted by Berenberg note as Thomas Cook tanks

The FTSE 250 index was up around 0.50% on the day in which Chancellor Philip Hammond revealed his budget for the upcoming year.

22 Nov Higher margins offset declining sales volumes at Cambria

Motor dealer Cambria Automobiles managed to successfully grow profit and revenue throughout the financial year, as per-unit profits counteracted a slide in sales volumes.

22 Nov First production at Texas asset transforms Pantheon Resources into full-cycle energy and power business

Oil and gas exploration firm Pantheon Resources announced "another year of progress" in its full-year results on Wednesday, as it completed the transition from a pure-play exploration company to a full-cycle energy and power business.