No OCR change from RBNZ
No OCR change from RBNZ - 31 January
Yesterday the Reserve Bank of New Zealand (RBNZ) announced the OCR would remain unchanged at 2.5%. This supports manufacturers and exporters, an increase at this point would add further upwards pressure to our already overvalued currency say the New Zealand Manufacturers and Exporters Association (NZMEA).
NZMEA Chief Executive John Walley says, “Any downwards movement in the currency is welcome, and generally keeping something of a lid on our currency is important to perhaps avoid ever greater imbalances between the tradable and non-tradable sectors.”
“Our overvalued currency needs policy attention in order to promote economic rebalancing in New Zealand. David Cunliffe has made some commitments to review monetary policy so far. We hope this discussion will continue in the run up to the election, and that other political parties are challenged to see this as a critical issue worthy of serious debate.”
“Bill English continues to make comments around the need for economic rebalancing between our tradable and non-tradable sectors. Better policy aimed at supporting our external sector is a necessary step in such rebalancing.”
“Whatever happens with monetary policy here, we must try and accommodate what is happening elsewhere, particularly in the USA and Australia.”
“The bank economists, chasing higher rates, are calling for increases as soon as possible, we would suggest the Reserve Bank hold off longer and determine the full efficacy of the LVR policy; who knows there may be another way after all?”