“Statement by Glenn Stevens, Governor: Monetary Policy Decision

At its meeting today, the Board decided to raise the cash rate by 25 basis points to 4.5 per cent, effective 5 May 2010.

Recently, forecasts for world GDP growth have been revised up again, and growth is expected to be at trend pace or a little above in 2010. Conditions in Europe remain quite weak, though recent data suggest growth is becoming more established in North America. In Asia, where financial sectors are not impaired, growth has continued to be strong, contributing to pressure on prices for raw materials. The authorities in several countries outside the major industrial economies have now started to reduce the degree of stimulus to their economies.

Global financial markets are functioning much better than they were a year ago, but sovereign risk concerns have escalated significantly in Europe over recent weeks. This has prompted additional efforts by policymakers to put fiscal policies onto a sounder footing and to provide support for Greece in the near term. To date, there has been very little contagion outside Europe.

Australia’s terms of trade are rising by more than earlier expected, and this year will probably regain the peak seen in 2008. This will add to incomes and foster a build-up in investment in the resources sector. Under these conditions, output growth over the year ahead is likely to exceed that seen last year, even though the effects of earlier expansionary policy measures will be diminishing. The process of business sector deleveraging is moderating, with business credit stabilising and indications that lenders are starting to become more willing to lend to some borrowers, though credit conditions for some sectors remain difficult. Credit outstanding for housing has been expanding at a solid pace. New loan approvals for housing have moderated over recent months as interest rates have risen and the impact of large grants to first-home buyers has tailed off. Nonetheless, at this point the market for established dwellings is still characterised by considerable buoyancy, with prices continuing to increase over recent months.

Recent data on inflation confirm that it has declined from its peak in 2008, helped by a noticeable slowing in private-sector labour costs during 2009, the rise in the exchange rate and the earlier period of slower growth in demand. In both underlying and CPI terms, inflation over the most recent 12 months was around 3 per cent. Nonetheless, the extent of decline from here may not be quite as much as earlier forecast and inflation now appears likely to be in the upper half of the target zone over the coming year.

With the risk of serious economic contraction in Australia having passed some time ago, the Board has been adjusting the cash rate towards levels that would be consistent with interest rates to borrowers being close to the average experience over the past decade or more. The Board expects that, as a result of today’s decision, rates for most borrowers will be around average levels. This represents a significant adjustment from the very expansionary settings reached a year ago.

The Board will continue to assess prospects for demand and inflation, and set monetary policy as needed to achieve an average inflation rate of 2–3 per cent over time.”

taken from: http://www.rba.gov.au/media-releases/2010/mr-10-07.html

“Today is Teach Your Kid to Save Day!”

By srobbins | April 27, 2010

Too many parents assume that their children are learning about financial literacy in the classroom. According to the 2006 Capitol One Back to School Survey, Only 43 percent of parents have discussed the importance of prioritizing needs and wants with their kids, and a surprising 42 percent of parents have not taken any steps whatsoever to discuss financial basics with their children.

With April being Financial Literacy Month, it is the perfect time for parents to sit down and discuss with their children how important it is to save their money. These lessons can be taught to children of any age but more importantly need to be taught to young adults to who are getting ready to go off to college and manage their own bank accounts and credit cards.

While it is important for parents to be talking to their kids about money, Junior Achievement is a great way for them to be learning about it while in school. Junior Achievement teaches students practical skills that position them for success, such as how to create and use a personal budget, how to calculate the cost of credit, and the importance of saving and investing for the future. And, our programs are often delivered by volunteers from the local business community, who can provide positive career role models for students.”

Educational Events in AUSTRALIA (International and National) for 2010

 enjoy, and feel free to add more!

Mat