Fed: RBA boss treks to Warrnambool to talk rates, terror and war
By Jim Hanna, Economics Correspondent
CANBERRA, Dec 5 AAP - The Warrnambool Racing Club may be an unlikely place to discussinterest rates, but that's where the country's chief central banker will be tomorrow.
Reserve Bank of Australia governor Ian Macfarlane will visit the Victorian coastaltown to front a parliamentary economics committee.
Mr Macfarlane will assess the Australian and global economies, leaving pundits to siftthrough the comments for clues about the direction of interest rates.
"If pressed, Mr Macfarlane will need to acknowledge, for example, that the US datais now a lot stronger than it was when the last quarterly statement on monetary policywas prepared in late October and early November," HSBC chief economist John Edwards said.
"It has become increasingly apparent that the real issue with the world economy isthe weakness of Japan and Germany, not the US," Dr Edwards said.
Mr Macfarlane can also expect questions about the impact of any US-led war on Iraqand whether the RBA knows of any groups laundering money in Australia on behalf of terrorists.
"I'd hope he'd give us assurances that if he found anything, he's got it under control,"
committee chairman David Hawker told AAP.
"We'd certainly be (asking for his views) on the impact of developments of the worldscene, which will include Iraq."
Labor's banking services spokesman Alan Griffin said he was interested in Mr Macfarlane'sviews on consumer debt and the government's role in the bond market.
"Household debt levels are going through the roof, so we'll ask him about that andcredit card reform," he told AAP.
Mr Macfarlane's testimony comes only days after the RBA left interest rates steadyfor the sixth month in a row.
It also follows official data showing Australia's non-farm sector continuing to growstrongly while the farm sector suffers from drought and soft world demand for its exports.
Mr Macfarlane is expected to confirm sluggish world growth and the drought preventedthe RBA from raising interest rates to neutral levels, as he indicated in his May appearance.
Westpac general manager of economics, Bill Evans, said he expects interest rates willstay on hold until the middle of 2003, when the RBA will resume lifting them.
Labor committee members Mark Latham and Anthony Albanese will miss the hearing, whichis being held in Mr Hawker's electorate of Wannon.
AAP jph/sw/apm/sb
KEYWORD: RBA
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