Interest or self-interest?

Foreign investors will be rubbing their hands in glee at today's decision by the Reserve Bank to raise the Official Cash Rate, said Green Party Co-leader Rod Donald.

"New Zealand already has one of the highest real interest rates in the world and today's move will make us an even more attractive target for foreign speculators out to make a quick buck," said Mr Donald.

"Raising interest rates will do nothing to reduce our dollar to a realistic level and that means more pain for farmers, exporters, tourist operators and domestic manufacturers competing against cheap imports.

Mr Donald asked whether the Reserve Bank was keeping the dollar high in order to meet its inflation target. "It's sacrificing the New Zealand economy is order to meet its obligations under the Policy Targets Agreement.

"The Reserve Bank decision, coupled with Dr Cullen's refusal to honour his promise to tackle the high New Zealand dollar, is crippling the productive sector," warned Mr Donald.

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