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Thursday, 9 March 1972
Page: 602


In the Senate on 11 November 1971 Senator McManus asked me, as Minister representing the Treasurer, a question concerning interest rates. The Treasurer has provided the following information in reply to this question:

The Government has been paying particularly close attention to developments in overseas financial markets in recent times and I am fully aware of the falls in interest rates in certain overseas countries to which Senator McManus referred in his question. While such reductions should not necessarily be seen as a precedent for interest rate adjustments in Australia, substantial action has been taken on the monetary front recently. Taking into account the lower yields for the February loan, yields on alt government securities have been reduced by 1 per cent or more since last September. In addition, there have been significant reductions in bank interest rates with the maximum overdraft rate being reduced by 0.5 per cent per annum and bank deposit rates falling in some cases by up to 1 per cent. Action has also been taken to remove the restraints on bank lending and a large release was made from Statutory Reserve Deposits in late December.

These important measures, in conjunction with the fiscal measures also announced recently will have the effects of bolstering the level of economic activity, reducing borrowing and other interest rates in the private sector, increasing the availability, of finance to the private sector, and of providing a boost to confidence on the part of business and the community generally.

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