Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search

 

Keith Rankin On Interest Rake hike

The Acting Governor of the Reserve Bank, while once again raising the Official Cash Rate as an act of further tightening monetary policy (see www.scoop.co.nz/mason/stories/HL0207/S00014.htm), notes that ongoing increases are less likely than he had expected in May.

The suggestion is that short-term interest rates will stabilise at around 6 percent. The main reason given by Dr Carr for his less hawkish outlook was that the exchange rate had risen faster than the Reserve Bank had anticipated. The second reason given was the shaky international outlook.

This is the first monetary policy statement since the budget. Yet at no stage did Dr Carr suggest that the Minister of Finance's (Michael Cullen) overtly tight fiscal policy had anything to do with the softer tone of Dr Carr's media statement.

Remember that Dr Cullen had claimed that fiscal policy had to be tight to keep a lid on interest rates.

Yesterday's statement suggests that Cullen's harsh fiscal policy makes not a jot of difference to interest rates. My column last week on this topic can be found at: www.scoop.co.nz/mason/stories/HL0206/S00165.htm.

Ends


© Scoop Media

 
 
 
Top Scoops Headlines

 

Ramzy Baroud: Why Solidarity Boats to Gaza Succeed

When Mike Treen, the National Director of the ‘Unite Union’ in New Zealand arrived at the airport in the capital, Auckland, on August 1, a group of people were anxiously waiting for him at the terminal with Palestinian flags and flowers... More>>

ALSO:

Lyndon Hood Satire: On Civility

Civility’s the prime virtue: it really can’t be beat / To fail to be pleasant is to court certain defeat. / I know that it requires restraint (they deal in hate, and fear) / But we shan’t get far – shall we? – if Civility’s not there! More>>