20 March 2002

New Zealand First Finance Spokesperson Winston Peters says that the Reserve Bank has acted far too quickly in raising the Official Cash Rate from 4.75 to 5.0% this morning.

“Even by the Reserve Bank’s own projections growth is still not certain and inflation will fall over the next two years. Dr Brash seems to have sacrificed potential economic growth in a still uncertain world for the potential threat of inflation.

“It is unfortunate that interest rates have been increased. We are not convinced that there are sufficient inflationary pressures to justify this. Instead the focus has been on short-term indicators rather than long term growth aims.

ENDS

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