Aust. interest rates rising

Press, 22 June 1983, Page 31

Aust. interest rates rising

PA Sydney Australian interest rates are on the way back up — a direct result of the size of the Federal Budget deficit — and analysts say the rise is likely to become even greater when economic recovery begins. Australian Guarantee Corporation became the first major financier to respond to the shrinking availability of money by raising its offered interest rates as much as one percentage point. AGC is the market leader and other major finance companies confirmed that 3 had their interest rates >r review. The ANZ bank’s main finance company subsidiary is Esanda. Esanda’s general manager, John Hogarth, warned that upward pressure on debenture rates was

likely to intensify as a result of the huge amounts semi-government institutions were borrowing on the commercial market. “When the economic recovery gets underway towards the end of this year, or early in 1984, this will increase corporate demand for funds, and so add to this interest rate pressure,” he said. AGC said its increase was a direct result of finning semi-government securities interest rates and Commonwealth Bond yields. Its rates on quarterlyinterest debenture from Monday will be: 12.5 per cent for six-month terms (previously 12.25 per cent), 12.75 per cent for one year (up 0.25), 14 per cent for two years (up one point), and 14.75 per cent for three, four and five-year terms (previously 14 per cent).