Following the 0.25% drop in the prime lending cash rate by the Reserve Bank of Australia (RBA), both electronics retailers and vendors are sighing a breath of fresh air.
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According to Harvey Norman head Gerry Harvey, it’s all part of getting a better end of year result.
“It will help bring sales up”, notes Harvey, adding that, “it is a very positive thing”.
However, in note of caution says Harvey, “the only dampener could be just how much bad debts the banks have, which we don’t know exactly how bad that is- maybe they don’t even know how much they are in debt”, quips Harvey.
Regardless, Harvey notes that, “as long as employment levels stay up, a cut in interest rates would mean that the end of year result will be better than it would have been normally”.
Over at IT vendor Panasonic, MD Steve Rust was unequivocal at the relationship between lower interest rates and higher consumer electronics.
“Lower interest rates means higher consumer demand for IT products”, concluded Rust.
Speaking from Singapore, Sony Australia chief Carl Rose noted that this rate rise is a very welcome fillip”, adding that in the lead up to the Christmas sales rush, as far as products such as TV’s and PSP’s are concerned, any extra money in the pockets of consumers “certainly cant do any harm”.
A 0.25 per cent cut in rates means that an average mortgage holder with a 25-year loan of $250,000, ends up with about $40 extra a month in the pocket.