By Aimee Chanthadavong
Despite the Reserve Bank Australia’s (RBA) earlier announcement this week that it will not be increasing interest rates, there is still a lot of uncertainty.
The National Retailers Association (NRA) executive director Gary Black told Retailbiz that the RBA has yet to rule out the possibility that there may be a rate rise in the immediate future.
“The natural level of uncertainty compounded by the unpredictability of the RBA is associated with the consumer spending pattern,” he said.
“The instability is caused by the continual month-to-month speculation in the media about whether interest rates will be increasing.
“From a retailer’s experience, over time this instability is impacting on consumer spending because consumers are in a phase of uncertainty of what their commitments are going to be when going forward.”
Since the halt of interest rate rises, the NRA has seen an increase in consumer spending, Black said.
“Retailers say that since there has been a halt in a rise, there has been a modest recovery and it’d be significantly impaired if the RBA decides to increase the rate in the make or break season of retail.”
Black suggested that the RBA should make an announcement about whether there will be anymore rate rises this year.
“The RBA should be sufficiently informed about the Australian economy and the international market and tell us that they don’t expect to increase the interest rates, rather than leave us with a month of continual uncertainty.”