Retail in Asia

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ARA: Retailers applaud unchanged interest rates

Peak retail industry body the Australian Retailers Association (ARA) said yesterday the Reserve Bank of Australia’s (RBA) decision to hold interest rates at 3.75-percent rise showed wise and patient strategy and would give retailers a chance to post consistent growth after a year of difficult and irregular trade.

ARA Executive Director Russell Zimmerman said the RBA has listened to retailers’ concerns that any interest rate rise in February would have been bad timing for retailers who were yet to feel the impact of three consecutive rate rises from October last year.

"Today the RBA has acknowledged February as the toughest month for consumers and retailers – particularly in light of the fact that full impacts of interest rate rises in October (0.25), November (0.25) and December (0.25) last year will take three to six months to flow through to the retail sector.

"Retail trade has been very patchy for the past 12 months but the hold on any interest rate rises will give retailers some breathing space and a fair go at getting back onto their feet through solid, consistent growth outside of the traditionally higher trading figures of the festive season.

"The RBA has also given consumers time to recoup some expenses from the financial strain of credit card bills from the festive season and back-to-school costs before implementing yet another rate rise.

"Official December Christmas figures will be released on Thursday, but more importantly, waiting to see post-Christmas retail trade figures in January and February before making further increases to interest rates will further demonstrate the RBA’s commitment to ensuring a return to steady economic growth,” Zimmerman said.