Media statement

For immediate release

Wednesday, 22 October, 2003

Copeland calls for alignment of NZ interest rate with Australia’s

United Future finance spokesperson, Gordon Copeland, today called on Reserve Bank Governor Alan Bollard to drop New Zealand’s cash rate tomorrow from 5% to 4.75%, so that it is exactly in line with the rate in Australia.

“I think there is a lot to be said for an alignment of the headline interest rate between the two nations. Bringing New Zealand’s rate into line with that of its Trans-Tasman neighbour makes us part of a much larger bloc.

“I worry when New Zealand has its rate individualised, and a margin above that available in Australia.

“It means that we have our head above the parapet and invite speculative activity which tends to drive up the value of the $NZ and hurt our exporters.

“I would dearly like to know what the effect would be of having an identical headline interest rate in both countries, and will never know unless we have the courage to actually do it. I think we have that opportunity now, and we should go for it.

“It should help to bring the value of the $NZ down slightly, thus boosting exports without damaging the domestic economy, or unduly fuelling house prices,” said Mr Copeland.

Ends.

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