Rate Rises begin to bite

The Herald Sun reports that:
"ANZ Banking Group boss Mike Smith has revealed his growing concern at how rising interest rates are affecting the ability of some consumers to repay their loans.
He said yesterday poor credit quality was a concern because people were not paying off their credit cards.
Mr Smith's comments on ABC television follow Westpac chief Gail Kelly who, earlier last week, acknowledged a rise in consumer arrears, but said it was not at a level to cause the bank a loss.
Mr Smith said poor credit quality at this time was strange because it normally occurred during periods of rising unemployment.
He said it now appeared to be seasonally related, noting a little bit of a situation where people were going on holidays and not repaying the monthly debt on their credit cards.
"But I think that interest rates are beginning to hurt a little bit now, so the recent rises are beginning to bite," he said, adding that the Queensland floods had contributed to the issue."

Regarding exchange rates, Mr Smith said the Aussie dollar would continue to rise.
"I think we will see it move through $1.10 and get even stronger than that," he said.
"I can't see anything that will knock it off the perch because it's not only the strong Australian dollar, it's also the weak US dollar.
"When you think about what is happening in the States, I can't see them increasing rates for at least 18 months."