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

 

RBNZ Crocodile Tears

RBNZ Crocodile Tears

The Reserve Bank of New Zealand’s (RBNZ) decision to increase the OCR by 25 basis points to 2.75% today is too early, and has the potential to further damage the tradable sector; say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “Early increases in our OCR puts us further out of line with the rest of the world in terms of monetary policy, which will have the effect of appreciating our already overvalued exchange rate. This is a major concern for exporters and import competing manufacturers.”

“The OCR increase will marginally increase borrowing costs for firms, but for most exporters, the margin lost through the exchange rate is an order of magnitude greater and as such much more damaging.”

“While the RBNZ once again has said they do not believe the current level of our exchange rate is sustainable in the long run, we are yet to see any policy response that does more than shed crocodile tears about the problem.”

“This change, and more generally the absence of a real policy response, will not be welcomed by the traded sector.”

“Inflation is important, but inflation pressures reside in the non-traded economy and interest rates do little to moderate inflation in that sector; reductions in headline inflation rely on deflation in the traded sector. For the traded sector the exchange rate determines what sort of margin gets banked, and margins are thin right now.”

“We saw all this before in the lead up to the global financial crisis, demonstrating the need for better targeted tools for the RBNZ to tackle inflation, without the broad and damaging effects of an overvalued exchange rate on the tradable sector from the OCR carpet bombs.”

“LVR “speed limits” were a step in the right direction, and seem to be having a significant and targeted effect on the housing market.”

“We need more smart, targeted policy, not more carpet bombs.”

ends

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Budget

It may seem like Oliver to be so bold as to ask the Finance Minister for more gruel – but what the Dickens, Steven Joyce… is this Budget really as good as it gets?

Supposedly, the public was going to receive significant rewards – an election year lolly scramble no less – for the eight years of belt tightening that they’ve endured, and for the rundown of essential public services.

Well, what Budget 2017 delivered instead in Education and in Health were allocations barely sufficient to maintain the current levels of service delivery More>>

Scoop Full Coverage: of Budget Announcements & Reaction
Latest: Scoop Search

 
 

Auditor-General Stands Down For Investigation: Gordon Campbell On (Not) Taking Responsibility

So Martin Matthews, our current Auditor-General wishes he could have detected “earlier” the fraud that occurred on his watch at the Ministry of Transport. Hmmm. But he could have detected it earlier, surely? That’s the point. More>>

ALSO:

NGOs Pleased: Govt To Halt Collection Of Client Data

Brenda Pilott, the chair of ComVoices and national manager of Social Service Providers Aotearoa, congratulates the government on its decision to call a halt to the collection of individual client data until the concerns of not-for-profit service providers have been worked through. More>>

ALSO:

Gosh: Blasphemy Law Repeal Struck Down

Chris Hipkins, the MP who tabled a Supplementary Order Paper to add our Blasphemy Law to the Statutes Repeal Bill, said this was a "sad day for freedom of speech, tolerance, and leadership". More>>

ALSO:

Gordon Campbell: On The Navy’s Dealings With Fat Leonard, And Twin Peaks

At an official level, our “she’ll be right” attitude routinely spills over into a keen resentment of anyone who suggests the outcomes may be less than satisfactory… The Navy has now gone one step beyond. It won’t even ask itself whether it did a good job. More>>

ALSO:

NZDF: Fifth Rotation Of Troops Heads To Iraq

The fifth rotation of New Zealand Defence Force troops left today for a six-month mission training Iraqi soldiers. More>>

ALSO:

Gordon Campbell: On The Demonising Of Iran

Will New Zealand still be willing to pursue its recent trade overtures to Iran, now that US President Donald Trump has used his speech in Riyadh to single out Iran as the main source of terrorism and instability in the Middle East? More>>

ALSO:

 
 
 
 

Opening The Election Supporters

 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election