In a speech to the American Chamber of Commerce on Friday, RBA governor Glenn Stevens once again emphasised the need to moderate the Australian economy through interest rate rises.
According to Mr Stevens, recent flat retail figures demonstrated a slowing in consumer driven inflation, but a 20 per cent rise in trade deals on coal and iron would continue to fuel inflationary concerns – forcing the RBA to act.
"To try to absorb the expansionary terms of trade impact without any macroeconomic policy restraint is not really an alternative at all," Mr Stevens told the group – adding that allowing this to occur would be a “policy mistake”.
Published: 16-06-08
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