Fed: NFF concerned about climbing interest rates

AAP General News (Australia)
08-02-2000
Fed: NFF concerned about climbing interest rates

CANBERRA, Aug 2 AAP - Continuing interest rate hikes are making Australian farmers
less competitive on world markets, the National Farmers' Federation said today.

Federation president Ian Donges said the latest 0.25 increase announced by the Reserve
Bank was another blow to rural areas.

He said higher interest rates not only affected debts carried by farmers but flowed
through the rest of the economy.

"For individual farmers there are the direct extra costs, but those costs flow through
on everything else that farmers use," he told AAP.

"Ultimately, all goods and services start to go up because of higher interest rates.

"It hurts farmers overall because they are suffering from low commodity prices generally,
and any extra costs just makes it more difficult to compete."

Mr Donges said farmers always suffered when high interest rates were accompanied by
higher inflation.

He said even though today's decision was just 0.25 per cent, it would mean an increase
of more than 1.5 per cent over the past eight months.

"I said at the start of the year I was concerned we could see rates up by 1.5 per cent,
and that's what looks like happening," he said.

"On top of that we've already had an increase in inflation this quarter, and in the
next quarter it will be up even further."

AAP sw/mfh/cjh/de

KEYWORD: RATES FARMERS

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