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Thursday 4 December, 2003

Copeland welcomes unchanged OCR

United Future finance spokesperson Gordon Copeland today welcomed the decision of Reserve Bank Governor Alan Bollard to leave the Official Cash Rate unchanged at 5%.

“I predict that this will have a positive impact on the $US/$NZ exchange rate to the benefit of exporters. Given our steadily worsening balance of payments situation right now, exporters need all of the assistance they can get.

“I am also delighted that for the first time in many years the headline NZ interest rates will now be slightly below those in Australia. An opportunity might now exist for New Zealand rates to track at or below Australian rates during 2004. If so, the Reserve Bank will have a rare opportunity to monitor and evaluate the impact on the $NZ.

“This in turn will provide valuable information for future monetary policy settings and the balance between controlling inflation and avoiding unnecessary instability in exchange rates – something which has got to be good both for exports and the NZ economy generally,” said Mr Copeland.

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