Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Reserve Bank plays it safe

Media release 24 January 2001

Reserve Bank plays it safe

"There were only two sensible options for the Reserve Bank of New Zealand official cash rate review; to hold interest rates or ease them," says Alasdair Thompson, Chief Executive, Employers & Manufacturers Association (Northern).

"The Reserve Bank chose the more conservative of these two options in maintaining its OCR at 6.5%.

"With the global economy slowing down and with our interest rates relative to other countries now quite a bit higher, an interest rate rise in New Zealand was out of the question," says Mr Thompson.

"An interest rate reduction at the next OCR review is still on the cards.

"The US Federal Reserve is expected to further reduce its interest rates as are other countries as they confront retreating growth rates.

"Debt levels in the US, as in New Zealand, are high. Spending is slowing rapidly and US corporate debt is going bad. The US stock exchange, especially the Nasdaq, is likely to take a beating in 2001 with some predicting it will fall as much as 50%. That will drive Americans to cash up and reduce their debt levels.

"What happens in the US effects the rest of the world. World trade growth will decline.

"The case for lower interest rates is mounting. The ANZ Job Ads Survey released last week showed a sharp drop in job ads in December. Retail sales statistics also showed a 0.2% drop in November.

"The latest annual CPI increase of 4% has peaked and economists are predicting inflation will be back below 1.5% by year's end.


"The main inflationary risk now is if wage and salary earners gain pay increases that exceed their growth in productivity," cautioned Mr Thompson.

"Hopefully, most people know that we cannot be compensated for imported price increases which make us poorer," concluded Mr Thompson.

Further comments: Alasdair Thompson Phone: Business 09 367 0911 Home 09 303 3951 Mobile 025 982 024

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

ScoopPro: Helping The Education Sector Get More Out Of Scoop

The ScoopPro professional license includes a suite of useful information tools for professional users of Scoop including some specifically for those in the education sector to make your Scoop experience better. More>>

Big Tax Bill Due: Destiny Church Charities Deregistered

The independent Charities Registration Board has decided to remove Destiny International Trust and Te Hahi o Nga Matamua Holdings Limited from the Charities Register on 20 December 2017 because of the charities’ persistent failure to meet their annual return obligations. More>>

57 Million Users' Data: Uber Breach "Utterly Preventatable"

Cybersecurity leader Centrify says the Uber data breach of 57 million customer and driver records - which the ride-hailing company hid for more than a year - was “utterly preventable”. More>>

Scoop 3.0: How You Can Help Scoop’s Evolution

We have big plans for 2018 as we look to expand our public interest journalism coverage, upgrade our publishing infrastructure and offer even more valuable business tools to commercial users of Scoop. More>>

Having A Cow? Dairy Product Prices Slide For Fourth Straight Auction

Dairy product prices fell at the Global Dairy Trade auction, retreating for the fourth straight auction amid signs of increased production... Whole milk powder fell 2.7 percent to US$2,778 a tonne. More>>

ALSO:

Statistics: Butter At Record $5.67/Block; High Vegetable Prices

Rising dairy prices have pushed food prices up 2.7 percent in the year to October 2017, Stats NZ said today. This followed a 3.0 percent increase in the year to September 2017. More>>

ALSO:

Science: New Research Finds Herbicides Cause Antibiotic Resistance

New University of Canterbury research confirms that the active ingredients of the commonly used herbicides, RoundUp, Kamba and 2,4-D (glyphosate, dicamba and 2,4-D, respectively), each alone cause antibiotic resistance at concentrations well below label application rates. More>>

ALSO: