Slowing economy to spark rise in short-term interest rates

A decline in the country's short-term borrowing costs, which saw yields more than halve in the past month, is set to reverse as slowing growth puts pressure on Government finances, according to economists.

Rates on 91-day Treasury bills tumbled to 9.65 per cent at an auction on November 6, from 13.6 per cent a week earlier and as high as 22 per cent last month.