Australia Raises Interest Rate to 4.75%

To my surprise – my forecast was wrong - Australia's central bank did raise their interest rates to 4.75%. While 0.25% is not much, let's hope that will do the job when it comes to pricking the real estate bubble there. Let's remember that 4.75 is the rate that Bernanke achieved before the big collapse of both US rates, and the economy in 2007 (already 3 years!).

Nov. 2 (Bloomberg) -- The Reserve Bank of Australia unexpectedly increased its benchmark interest rate on concern stronger growth will cause inflation to accelerate, driving the nation’s currency toward parity with the U.S. dollar.

Governor Glenn Stevens raised the overnight cash rate target a quarter point to 4.75 percent in Sydney, saying the economy has “relatively modest amounts of spare capacity” and citing risk of “inflation rising again over the medium term.” It was the RBA’s first move in six months.

Central planners are at it again...

[...]“They’re trying to nip inflation in the bud,” Matthew Circosta, an economist at Moody’s Analytics in Sydney, said on Bloomberg Television. “Back in 2007 they were behind the curve” in raising rates and “I don’t think they want to make the same mistake this time around.”

As usual, the same entity which creates inflation is pretending to fight it.