Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


OCR reduced to 5.50 per cent

OCR reduced to 5.50 per cent

The Reserve Bank today reduced the Official Cash Rate from 5.75 per cent to 5.50 per cent.

Reserve Bank Governor Alan Bollard commented "In January this year, we said that if the exchange rate remained unchanged or appreciated further, and if the evidence pointed to reduced pressures on resources and medium-term inflation, then there might be scope for a cut in the OCR later in the year. In our judgement, these conditions have now been met.

"The available data suggest that growth in the New Zealand economy is slowing as we projected in our March Monetary Policy Statement. A weak international economy is now being reflected in softer activity in New Zealand's tradable sector. The domestic economy remains relatively robust, especially in the housing market. However, the weaker tradable sector is expected to feed through into reduced domestic demand elsewhere in the economy, as exporters' incomes decline.

"With the passage of time, we are now more confident that inflationary pressures will ease, which is the basis of today's decision. This should not be interpreted as the Bank now having a more pessimistic view of the New Zealand economy, but rather as a consequence of our earlier expectations being confirmed.

"While the economy is progressing as expected, recent dry conditions in some parts of the country, potential electricity shortages and the SARS virus add additional downside risks to the economic outlook, though at this stage we do not expect a large enduring economic impact.

"The Policy Targets Agreement, signed in September last year, requires the Bank to avoid 'unnecessary instability in output, interest rates and the exchange rate'. Based on this, we have been prepared to adjust interest rates a little faster in response to the unfolding evidence of a slowdown. However, any future easings will depend on the evidence still suggesting that inflation will settle comfortably within the target range over the medium term."

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines


Wellington: Predator Free Capital Plan

Wellington City Council (WCC), the Greater Wellington Regional Council (GWRC) and NEXT Foundation, today announced a joint collaboration to make Wellington the first Predator Free capital city in the world. More>>


Gordon Campbell: On Judith Collins’ Efforts At Self Correction

Thousands of prisoners currently in prison may be entitled to an earlier release than expected – and compensation – because Corrections has incorrectly calculated their term of imprisonment. Unless of course, the government buries its mistakes by changing the law and retro-actively getting itself off the hook… More>>


More Justice & Corrections

Sector Opposes Bill: Local Government Bill Timeframe Extended

The Minister of Local Government Peseta Sam Lotu-Iiga has asked the Select Committee to extend the report back date for the Local Government Act 2002 Amendment Bill (No 2). More>>


Breed Laws Don’t Work: Vets On New National Dog Control Plan

It is pleasing therefore to see Louise Upston Associate Minister for Local Government calling for a comprehensive solution... However, relying on breed specific laws to manage dog aggression will not work. More>>


Not Waiting On Select Committee: Green Party Releases Medically-Assisted Dying Policy

“Adults with a terminal illness should have the right to choose a medically assisted death,” Green Party health spokesperson Kevin Hague said. “The Green Party does not support extending assisted dying to people who aren't terminally ill because we can’t be confident that this won't further marginalise the lives of people with disabilities." More>>


General Election Review: Changes To Electoral Act Introduced

More effective systems in polling places and earlier counting of advanced votes are on their way through proposed changes to our electoral laws, Justice Minister Amy Adams says. More>>

Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news