Business & Finance
Australia needs to raise interest rate: IMF
WASHINGTON : Australia will likely need to raise its interest rate, which has been on hold since November, to contain
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WASHINGTON: Australia will likely need to raise its interest rate, which has been on hold since November, to contain inflationary pressures caused by the impact of its mining boom, the International Monetary Fund said on Saturday.
In its annual review of the Australian economy, the IMF said that without further monetary policy tightening inflation would rise above the central bank's 2-3 percent target band in 2012.
The IMF estimated that the Australian dollar is overvalued by somewhere between 10 to 20 percent, although it said the currency would depreciate if global financial markets become severely disrupted.
Copyright Reuters, 2011
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