RBA warns negative effects of the GFC are not over by a long shot

The RBA says that while the rest of the world battles its way out of recession, the full impact of the GFC is yet to be felt.

The RBA governor says that bad debts in Europe and the USA are yet to have peaked and as a result of expected write-downs, the local share market will come under selling pressure at some stage. The governor also said this would see the cost of credit increase.

The RBA therefore warns against excess enthusiasm and recommends some caution at the potential risks in the market.

The RBA held off increasing interest rates in February and yesterday said that it has no specific timetable for lifting the official rate to a more neutral level.