21 Oct 2009

Reserve Bank tipped to raise interest rates in March

8:12 am on 21 October 2009

There are predictions the Reserve Bank will raise interest rates as early as March next year.

Governor Alan Bollard has said he expects to keep the cost of borrowing at or below current levels until late 2010.

However, AMP Capital Investors head of investment strategy Jason Wong predicts the Reserve Bank could raise interest rates as early as March, as the recovery of the economy hastens and the housing market continues to strengthen.

Westpac economist, Dominic Stephens, agrees, saying inflation is nowhere near as weak as the Reserve Bank would like it to be.

The next review of the Official Cash Rate by the Reserve Bank is on 29 October.

The OCR is currently 2.5%. It was lowered from 3% on 30 April.