RBA 'haven't got much right': Kolenda

by Adam Smith,Mackenzie McCarty06 Feb 2013

 

The RBA committed a "blunder" in their decision to leave rates on hold, according to one industry figure.
 
The RBA largely followed economists' expectations yesterday by choosing to leave the cash rate on hold at 3%. But 1300 Home Loans managing director John Kolenda said the decision shows a "complete lack of common sense".
 
"The domestic economy is going nowhere at the moment and the RBA board have failed most consumers and other struggling sectors of the economy by sitting on their hands," he said.
 
While Kolenda has argued the economy is a "mixed bag" and that the RBA "haven't got much right" in their handling of the cash rate, RP Data's Tim Lawless said the decision to hold on rates made sense.
 
"Consumer confidence has shown some improvement, commodity prices are once again on the rise, and share markets have shown some consistent gains as well," Lawless said.
 
But Kolenda said the Reserve still had scope to further stimulate the economy with cuts.
 
“They still have plenty of ammunition as our official interest rate remains well above most of our trading partners – hence the continuing strong Australian dollar which is hurting exporters and the tourist industry.”

COMMENTS

  • by PS 6/02/2013 10:07:30 AM

    Kolenda simply doesn't understand economics enough to talk about the RBA.

    The official interest rates of our trading partners is set to reflect their domestic economy. Are we in the same economic situation as China? United States? India?

    These are one-sided comments that make mortgage brokers hungry for lower rates so they can make more money.

  • by PPS 6/02/2013 1:56:00 PM

    @PS That's a little patronizing, don't you think?

    I'm tired of this mortgage broker bashing, making brokers look like 'money hungry' dimwits that don't 'understand economics enough to talk about the RBA'.

    The truth is, brokers are in a fine position to be making comments about the RBA this is their business and someone like Kolenda who has spent half his life in the industry would have a fair and considered analysis of the situation.

    You cannot certainly believe that the economic situation of China, the United States or India does not impinge on Australia's. It's this kind of small mindedness that keeps Australia behind.

    There's also no need to cross examine an perfectly balanced article. I think readers here are intelligent enough to see if comments are one sided or not, in spite of what you say.

  • by PS 7/02/2013 10:51:37 AM

    I remember reading on here a few months back that Kolenda called the Australian economy diabolical in asking for lower interest rates.

    At the time I thought it was such a 'fair and considered' view of life in Australia.