Be confident, Reserve Bank chief urges

Australians should not lose confidence in the nation’s economy, the Reserve Bank Governor says.

Glenn Stevens, delivered that message, when he addressed the Senate Economics Committee, in Sydney today.

However Mr Stevens also reminded Australians that they can expect the nation’s interest rates to rise, as the recovery takes hold.

“I have maintained throughout (the crisis) that Australia’s medium term prospects remain good,” the governor said.

“And that we should not lose confidence.”

Mr Stevens said both business and personal confidence levels had shown a “very substantial” pickup from the low points the nation had seen earlier this year.

Share prices had risen by almost half in that time.

However, he said both fiscal and monetary support, that had been delivered in the crisis, would have to be unwound as private demand increases.

“In the case of monetary policy, the bank has already signalled that that interest rates can be expected, at some point, to move off their current unusually low levels, as recovery proceeds,” Mr Stevens said.