FED:Very low rates not a good thing, RBA says

AAP General News (Australia)
02-11-2011
FED:Very low rates not a good thing, RBA says

CANBERRA, Feb 11 AAP - Very low interest rates are not a good thing for a national
economy, Reserve Bank of Australia governor Glenn Stevens says.

Mr Stevens said keeping interest rates very low for an extended time was not beneficial
for an economy.

"People used to ask us, `well, Japan has zero interest rates, why can't we have that?'"

he told the House of Representatives economics committee on Friday.

"A - you would not want it because the reason Japan had it was something you would
not want to go through.

"And B - in its own right, it is not a very good place to be for a lengthy period of time."

The Bank of Japan's discount rate has been below one per cent since late 1995.

Australia's overnight cash rate is 4.75 per cent after hitting 3.0 per cent between
April 2009 and October 2009.

AAP el/dlm/was

KEYWORD: RBA JAPAN

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