Australia’s central bank yesterday warned of a “fairly robust upswing” as the nation experienced the biggest minerals and energy boom in more than 100 years, flagging a return to rate hikes.
Reserve Bank of Australia Governor Glenn Stevens said the country had experienced several years of favorable growth and he forecast the trend to continue, with above-average growth expected into next year.
“We expect, and indications from businesses are that they do as well, that resource sector investment will rise further, as we experience the largest minerals and energy boom since the late 19th century,” Stevens said.
“If downside possibilities do not materialize, the task ahead is likely to be one of managing a fairly robust upswing,” he said.
“Part of that task will, clearly, fall to monetary policy,” he said.
Resilient Asian demand for Australia’s raw materials helped it become the only advanced economy to dodge recession during the global downturn, and Stevens said high export prices would bolster the economy “even as the stimulative effects of earlier low interest rates and budgetary measures continue to unwind.”
Inflation would not fall much further and the terms of trade would remain at record heights, he said, indicating that the central bank may not remain on the sidelines much longer.
The bank has held interest rates at 4.5 percent at its past four monthly meetings after Australia in October last year became the first country to tighten monetary policy following the downturn from a 50-year low of 3 percent.
Analysts said the central bank’s comments firmed the chances of a rate hike before the end of the year, with ANZ Bank economist Katie Dean saying next month was a “live” possibility given the jobless rate had fallen to 5.1 percent.
“The minutes from the September board meeting, due [today], will provide guidance on how close the recommencement of the RBA’s tightening cycle is,” Dean said.
“In our view, the national flow on from the terms of trade boom supports the case that interest rates will need to move to a contractionary setting, potentially upwards of 5.50 percent in 2011,” she said.
The Australian dollar rallied following the remarks, fetching US$0.9455 in late trade, up from Friday’s close of US$0.9439.
Taiwan’s Lee Chia-hao (李佳豪) on Sunday won a silver medal at the All England Open Badminton Championships in Birmingham, England, a career best. Lee, 25, took silver in the final of the men’s singles against world No. 1 Shi Yuqi (石宇奇) of China, who won 21-17, 21-19 in a tough match that lasted 51 minutes. After the match, the Taiwanese player, who ranks No. 22 in the world, said it felt unreal to be challenging an opponent of Shi’s caliber. “I had to be in peak form, and constantly switch my rhythm and tactics in order to score points effectively,” he said. Lee got
EMBRACING TAIWAN: US lawmakers have introduced an act aiming to replace the use of ‘Chinese Taipei’ with ‘Taiwan’ across all Washington’s federal agencies A group of US House of Representatives lawmakers has introduced legislation to replace the term “Chinese Taipei” with “Taiwan” across all federal agencies. US Representative Byron Donalds announced the introduction of the “America supports Taiwan act,” which would mandate federal agencies adopt “Taiwan” in place of “Chinese Taipei,” a news release on his page on the US House of Representatives’ Web site said. US representatives Mike Collins, Barry Moore and Tom Tiffany are cosponsors of the legislation, US political newspaper The Hill reported yesterday. “The legislation is a push to normalize the position of Taiwan as an autonomous country, although the official US
‘CROWN JEWEL’: Washington ‘can delay and deter’ Chinese President Xi Jinping’s plans for Taiwan, but it is ‘a very delicate situation there,’ the secretary of state said US President Donald Trump is opposed to any change to Taiwan’s “status quo” by force or extortion and would maintain that policy, US Secretary of State Marco Rubio told the Hugh Hewitt Show host on Wednesday. The US’ policy is to maintain Taiwan’s “status quo” and to oppose any changes in the situation by force or extortion, Rubio said. Hewitt asked Rubio about the significance of Trump earlier this month speaking with Taiwan Semiconductor Manufacturing Co (台積電) chairman C.C. Wei (魏哲家) at the White House, a meeting that Hewitt described as a “big deal.” Asked whether the meeting was an indication of the
CHANGE OF TONE: G7 foreign ministers dropped past reassurances that there is no change in the position of the G7 members on Taiwan, including ‘one China’ policies G7 foreign ministers on Friday took a tough stance on China, stepping up their language on Taiwan and omitting some conciliatory references from past statements, including to “one China” policies. A statement by ministers meeting in Canada mirrored last month’s Japan-US statement in condemning “coercion” toward Taiwan. Compared with a G7 foreign ministers’ statement in November last year, the statement added members’ concerns over China’s nuclear buildup, although it omitted references to their concerns about Beijing’s human rights abuses in Xinjiang, Tibet and Hong Kong. Also missing were references stressing the desire for “constructive and stable relations with China” and
RSS