Statement by RBA's MacFarlane on rate increase

In a statement following the Reserve Bank of Australia's decision to increase interest rates to 5 per cent on 5 November, RBA governor Ian MacFarlane said "the Board's view is that it is no longer prudent to continue with such an expansionary policy stance". Strong demand for credit increased the danger on general macroeconomic grounds in delaying a tightening of policy, the statement said.

Source: RBA

Following a decision taken by the Board at its meeting yesterday, the Bank will be operating