This is a normal experience in an economic expansion: as economic activity normalises interest rates do the same – though of course it is the interest rates borrowers actually pay, and that savers receive, that are important rather than the cash rate per se. The Board sets the cash rate with that in mind.
Mr Chairman, I have previously said that Australia would come through the global crisis well placed to benefit from renewed expansion. For a time, the challenge was to sustain confidence, and to support the economy and financial system through some exceptionally demanding circumstances. By and large those efforts were successful. Now we must turn our attention to the challenges of managing an economic expansion.