Economy

Dec 20, 2017

Why the RBA needs a more fluid approach to interest rate moves

The RBA's habit of moving the interest rate by a quarter of a percent each way -- regardless of the needs of the economy -- is outdated and unhealthy.

Jason Murphy — Journalist and economist

Jason Murphy

Journalist and economist

Reserve Bank of Australia

Australia’s Reserve Bank is feted around the world. It’s a global leader and innovator. But there’s one thing it does in an old-fashioned -- possibly even dangerous -- way: it moves official interest rates in multiples of 0.25% and only in multiples of 0.25%.

Right now, with the Australian economy in an extremely unusual position, it is time to ditch that old practice.

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4 comments

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4 thoughts on “Why the RBA needs a more fluid approach to interest rate moves

  1. AR

    If there is one certain point to come from this, and a thousand similar articles, it is that economists aren’t worth feeding.

    1. john murphy

      one certain point about this reply is that this guy is no economist.
      Is he writing from a building in a desert? Is his head in the sand? Or is he getting an inside view of a camel?
      The thrust of the article is that there is room for flexibility in the scale and direction of RBA moves on interest and that any move will be more po.tent at present due to the small base

    2. [email protected]

      I think the one certain point to come from this, and a thousand similar comments, is that people who write comments without substance like your comment aren’t worth feeding.

  2. old greybearded one

    Hmm. I would like to see all of the useless clods and that includes most economists have to work in the world they claim to understand. Out of the office, everyday issues where you might not have next weeks rent. Try that on.

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