Fed: No action on rates expected by Reserve

AAP General News (Australia)
12-06-2000
Fed: No action on rates expected by Reserve

CANBERRA, Dec 6 AAP - Economists are expecting the Reserve Bank of Australia to keep
interest rates steady this morning.

The Reserve board met yesterday, for the last time this year, and any decision on interest
rates will be announced at 9.30am (AEDT).

But with continuing evidence that the economy is slowing, the Reserve is expected to
let 9.30am (AEDT) go by without comment, as is customary when the central bank leaves
rates unchanged.

"I think we'd all fall off our chairs if we saw the RBA do anything," HSBC Bank Australia
economist Grant Fitzner said.

The Australian Bureau of Statistics reported company profits fell in the September
quarter by 9.5 per cent, the first fall in four years.

A survey of manufacturing by Westpac and the Australian Chamber of Commerce and Industry
(ACCI) found production is down, business confidence is waning and overtime dropped for
the first time in two year.

Treasurer Peter Costello remained upbeat despite the figures, pointing out they came
on top of a very strong June quarter.

"Company profits are now 17.1 per cent higher than they were a year ago," Mr Costello
told parliament.

"There's been some moderation of those exceptionally strong levels in the September
quarter but none the less the profit share ... is at historically high levels."

Australian Chamber of Commerce and Industry chief executive Mark Paterson said the
figures were not evidence of a recession.

"We don't see in these numbers any suggestions of a recession," he said.

AAP sw/gmw/de

KEYWORD: ECONOMY DAYLEAD

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