Swan declares era of cheap money is over

Article Category: Demographics

By AAP, 15 September 2009

"We have to price risk appropriately," he said today on the first anniversary of the onset of the global financial crisis.

"We're not going back to an era of cheap money."

As the Australian and global economies begin to recover, the Reserve Bank would make adjustments to its "emergency level" cash rate, presently at a 49-year low of 3 per cent, Mr Swan said.

Analysts are divided over the timing of the next interest rate movement, but all agree that up is the only way rates are headed.

The Government's fiscal stimulus and the central bank's monetary policy would be wound back as the private sector revived, Mr Swan said.

"That is how monetary and fiscal policy works."