Media Release

23 October 2008

OCR Cut Too Little Too Late

The Reserve Bank should have been bolder and cut the Official Cash Rate by a full one and a half percent to relieve serious damage to the economy, says New Zealand First leader Rt Hon Winston Peters.

“While this mornings cut is a reasonable first step, it is too little, too late,” said Mr Peters.

“Other countries have slashed their interest rates substantially in recent weeks. Our Reserve Bank has twiddled its thumbs while jobs are lost, businesses have gone broke and families lost equity in their homes.

“The loss of home equity is particularly distressing for many – figures in this morning’s paper show an estimated 130,000 homeowners now have homes valued at less than what they owe their bank. The Reserve Bank should have cut the rate earlier to ease the burden for people in such a situation.

“I also hope the trading banks to pass the full effect of the cut on to struggling homeowners and not use the credit crunch as an excuse to add to their already obscene profits.

“The fact remains that the Reserve Bank had the chance to be bold and act earlier with a more substantial cut but it failed to act. Ordinary Kiwi’s will suffer for that failure,” said Mr Peters.

ENDS

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