Now you really can bet the house on rates going up
Thursday, 28 August 2008
Most homeowners already feel like they have plenty riding on the Reserve Bank of Australia’s monthly interest rate decision, but for those who want a little extra excitement there is now a way to lift the stakes.
The Australian reports that betting agency Centrebet has started a market in which people can take a punt on whether the RBA will lift, leave or drop interest rates when it meets each month.
It should come as no surprise that rate movements are becoming a subject for betting – property watching is already Australia’s favourite pastime, so this is just the logical next step.
And, of course, punting on rates already happens in one way – currency traders take positions based around interest rate movement forecasts all the time.
Centrebet’s book is already open. So how do the odds stand for the next rates decision on Tuesday next week? The favoured outcome is a cut of 0.25%, paying $1.25, followed by a $3.50 payoff if there is a bigger cut. No change yields a fairly lucrative $5, and a rise $51.
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