RBA's Stevens warns borrowers on rates

The message wasn't particularly new, but its presentation was a first.

Reserve Bank of Australia (RBA) governor Glenn Stevens has again warned borrowers that the central bank is aiming to get interest rates back to a more "normal" level, a message it has banged on about for several months.

But this time, it was in an interview with Channel Seven's Sunrise, the breakfast TV program that first brought Kevin Rudd to a wider audience before his election win in 2007.

But unlike Mr Rudd, who has just returned to a regular weekly Sunrise slot, this week's pre-recorded interview with Mr Stevens - which is being broadcast in segments over the next couple of days - is a one-off.

The central bank governor's first interview with a commercial network on Monday was to mark the RBA's 50th anniversary.

It takes the bank's policy of transparency to a new level.

After the 2007 election, the RBA agreed with Treasurer Wayne Swan to be more open by publishing its monthly board minutes as other major central banks did and releasing a statement after every board meeting whether or not rates changed.

Chief economist at Commonwealth Bank of Australia Michael Blythe said the governor's appearance on Sunrise was all part of getting the message out.

"The top end of town is well covered by speeches and so on, but if you want to get your message out there to the broader community then there is probably not a much better channel than that," Mr Blythe told AAP.

"It lifts your profile, especially if you think you need to explain why you are doing a nasty thing such as raising interest rates."

The interview with Seven's David Koch was more than just a chance to show off the boardroom where rate decisions are made.

It also allowed the governor to warn borrowers of the inevitable - that the cash rate must move gradually towards a more normal level - normal being the average since the early 1990s of around five per cent.

The cash rate currently sits at 4.0 per cent after four rate increases in the past six months, having been slashed to a near 50-year low of 3.0 per cent, an "emergency" level during the depths of the global financial crisis (GFC).

"Once the emergency's passed and things gradually look more normal, then it's not wise to leave interest rates down at rock bottom any longer than you need," Mr Stevens said in the interview.

"And you shouldn't assume they'll stay that low because that assumption will prove to be unfortunate. I think it would be not doing people any favours to have a prolonged period of very low rates and then hammer them unexpectedly."

Whether or not the interview was just aimed at the mortgage belt, it certainly stirred up financial markets.

They are now factoring in a greater than 50 per cent chance of a rate move at the April 6 board meeting, when previously a May increase was considered more likely.

"(The interview) might have had some influence," Mr Blythe said explaining Monday's shift in market pricing.

"It probably surprised the markets that Mr Stevens should appear on a program like that, but he didn't say anything that he hasn't before."

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