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Hold Off, Dr Bollard

6 December 2005

Hold Off, Dr Bollard

Farmers strongly advise the Reserve Bank to not raise interest rates on Thursday, said Charlie Pedersen, President of Federated Farmers of New Zealand (Inc).

New Zealand farmers are under a lot of pressure due to falling world commodity prices and the kiwi dollar at a 20-year high. Weak prices and strong dollar mean lower returns at the farm gate.

"New Zealand already has the highest interest rates in the developed world. Business confidence has crashed, and other indicators point to a slowing economy. We definitely do not need more pain from even higher interest rates," said Mr Pedersen.

"The Federation's farmer leaders including myself are receiving many emails and phone calls from members who are extremely concerned about the economic outlook, and the possibility of more interest rate pain."

Higher interest rates stoke buying of the kiwi dollar in a spiral that is wreaking havoc among exporters, the backbone of the economy, he said.

"Rural areas are heading for a hard landing. On behalf of farmers and other exporters, I implore the RBNZ to reconsider the economic situation and hold off increasing interest rates yet again," concluded Mr Pedersen.

ENDS

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