26 Jul 2013

Exporters glum over rate hike prospect

9:24 am on 26 July 2013

Expectations that interest rates will start rising early next year is worrying some exporters.

On Thursday the Reserve Bank left the Official Cash Rate on hold at a record low 2.5% but signalled the interest rate is likely to rise sometime in 2014.

The chief executive of vehicle electronics company Imarda says exporters will be hit twice - once through higher interest bills, and again by a higher dollar, reducing their competitiveness against foreign rivals.

Selwyn Pellett hopes the Reserve Bank's proposed restrictions on low deposit loans will delay the need to raise the cost of borrowing.

The Reserve Bank says the pace of future hikes will depend on the booming housing market's impact on inflation, and it remains to be seen what effect proposed restrictions on low deposit loans will have on limiting housing growth.