30 April 2002

“It is completely inappropriate for the former Reserve Bank Governor, Don Brash, to comment publicly on what he expects will happen to interest rates in the May Monetary Policy Statement,” Finance Minister Michael Cullen said today.

He was commenting on Dr Brash’s tip, reported in the media in Australia and here, that interest rates would probably increase next month either by 25 points or by 50 points.

“Dr Brash had been participating in the Bank’s internal debates leading up to the May OCR review before he resigned. In fact his resignation came in the fifth week of what is a seven week debating process so he is clearly privy to inside information.

“More than that he should be aware that, given his peculiar position, his comments have the potential to move the market.

“Dr Brash is in a political role now. He should be careful to ensure that his actions and his motives are not liable to misinterpretation,” Dr Cullen said.

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