Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Interest Rates Held - Anxiety Will Lessen

Wednesday, August 14, 2002

Interest Rates Held - Anxiety Will Lessen

Today's announcement by the Reserve Bank keeping the OCR at 5.75 per cent will go some way to dispelling the anxiety building over the high level of New Zealand's interest rates.

"This year the Reserve Bank raised interest rates too rapidly and had signalled this was likely to continue despite the cloudy economic outlook," said Alasdair Thompson, chief executive of the Employers & Manufacturers Association (Northern).

"Today's 'wait and see' will help ease business unease, especially for exporters," Mr Thompson said.

"It's worth recalling the reason that inflation has averaged just under three per cent over the last two years was a result of the unexpected devaluation of our currency when the US dollar soared.

"At the time the Reserve Bank was forecasting slight gains for our dollar whereas it sank rapidly when the US dollar rose.

"The unanticipated devaluation boosted actual inflation as imports, especially transport fuels, became more expensive. If the unforeseen devaluation had not occurred New Zealand's inflation would have been very close to zero.

"We are also concerned the Reserve Bank has put too much emphasis on growth rather than on inflation itself.

"Acting Reserve Bank Governor Rod Carr told a Parliamentary Select Committee (27/5/2002) that he tightens monetary policy to slow the economy when growth rises above three per cent.

"EMA supports the Reserve Bank Act and its objective of price stability with low inflation, but we believe the existing 1.5 per cent midpoint inflation target has restricted growth. Therefore we support a Policy Targets Agreement (PTA) which sets a target of 2.5 per cent over the business cycle, rather than annually, within a range of plus or minus 0.5 per cent.

"This would have the advantage of harmonizing our target with countries like Australia, the UK and the US."

Ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>

ALSO:

Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>

ALSO:

MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>

ALSO:


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>

ALSO:

Mediaworks: Reaches Agreement To Sell TV Operations To Discovery, Inc.

New Zealand’s largest independent commercial broadcaster MediaWorks and the global leader of real-life entertainment Discovery Inc. (“Discovery”) are pleased to announce they have reached a binding agreement regarding the sale of MediaWorks’ ... More>>

ALSO:

Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>

ALSO:

NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>

ALSO:

Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>

ALSO:

SAFE: Live Export Ship Carrying 5,800 New Zealand Cows Goes Missing In East China Sea

Livestock carrier Gulf Livestock 1 sent a distress signal at 4:45am NZT yesterday in the East China Sea. The area is affected by Typhoon Maysak. At 4pm a patrol plane spotted a lifeboat - with no people in it - and a man in lifejacket nearby. The ship ... More>>

ALSO:

FMA: Kiwisaver Fees Don't Match Performance

The Financial Markets Authority (FMA) today published an independent report into the passive and active investment management styles [i] used by KiwiSaver providers. The FMA commissioned MyFiduciary to test the extent that KiwiSaver providers were ... More>>