Changes needed to NZ monetary policy - CTU

Thursday, 19 November 2009, 5:03 pm
Press Release: New Zealand Council of Trade Unions

CTU media release
19 November 2009

Changes needed to NZ monetary policy - CTU

New Zealand urgently needs to change the way it operates its monetary policy and exchange rate, said CTU Economist and Policy Director Bill Rosenberg today.

“The statement by Phil Goff that Labour is willing to look at alternatives to the current rules is very welcome. Current monetary policy is not only weak in affecting the monetary supply at crucial times like the present crisis and during the height of the housing price bubble, but has also been a significant contributor to our overvalued exchange rate,” said Rosenberg.

“Though policy objectives have been more flexible in recent years, they are still too narrowly focussed on interest rates.

“There are other tools and objectives that should be considered in setting monetary policy. We should also be looking ways to reduce the volatility of the exchange rate and to set it at a value that gives exporters and firms competing with imports a better chance.

“These are not simple matters but they are ones the CTU has been considering in its development of an alternative economic strategy. They need an open minded investigation.

“Any changes to monetary policy should sit alongside initiatives to avoid house price bubbles and promote domestic savings.”

ENDS

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New Zealand Council of Trade Unions

Te Kauae Kaimahi

The New Zealand Council of Trade Unions Te Kauae Kaimahi brings together over 350,000 New Zealand union members in 40 affiliated unions. We are the united voice for working people and their families in New Zealand.

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