No Way To Run Our Monetary Policy – Peters
21 May 2001
The Rt Hon Winston Peters MP, Leader of New Zealand First, said that last week’s Reserve Bank decision to cut the official cash rate to 5.75% was the right decision albeit a conservative one.
“The fact is that economic conditions amongst most of our major trading partners have flattened considerably and the knock on effects in our heavily export dependent economy cannot be escaped.
“While the American and Australian central banks have, this year, cut official interest rates by 250 and 125 basis points respectively New Zealand has responded with a cut of 75 basis points. Today we have our Governor wondering out loud whether he’s eased rates enough. That is a question which will only lead to confusion in the market. This is no way to run our monetary policy. If our Governor has got the courage of his convictions he will simply stick to his announcement and not enter into public musings and justifications” Mr Peters said