Lower Interest Rate "Not Before Time"
Lower Interest Rate "Not Before Time" - Farm Economist
The reduction in base interest rate announced by the Reserve Bank will bring most welcome relief to farmers who have seen their returns tumble in the past six months, according to rural economist Donald Fraser.
"The rising dollar has led to a fall in most farm gates prices, and may farmers are struggling," says Fraser.
"Add to that the threat of the SARS virus and its impact on markets, the drought in many regions, and the threat of electricity shortages and it's no wonder there has been a drop in rural business confidence."
"Our interest rates were as high as anywhere in the Western world, and the reduction is not before time", says Fraser, who believes the move will give farmer income and confidence a boost.
Don Fraser is a rural finance specialist.
He can be contacted on 021 951 170