Australia raises interest rates for second consecutive month

Australia, which is one of the few developed economies not to have fallen into recession like its counterparts throughout the world, has increased interest rates from 3.25% to 3.5%.

It is the second month in a row that interest rates have increased and the move was not unexpected.

The Australian economy has benefited from an increase in commodity prices, while exports have received a boost due to demand from China for its iron ore and other raw materials.

Official figures recently revealed that the Australian economy exceeded expectations in the April to June period by experiencing growth of 0.6% compared with the previous quarter.

Earlier this year, the Australian Government announced a multi-million dollar stimulus package, designed to help the country weather the economic downturn.

In a statement, Reserve Bank of Australia governor Glenn Stevens, said: “With the risk of serious economic contraction in Australia now having passed, the board view is that it is prudent to lessen gradually the degree of monetary stimulus that was in place when the outlook appeared to be much weaker”.

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