Media statement Thursday, January 29th, 2009

Big cut to OCR welcome

The bigger than forecast cut to the OCR is appropriate, the Employers & Manufacturers Association (Northern) says.

But the association is keen to see the Reserve Bank monitor and publish what the banks do to reduce their lending rates.

"We are receiving complaints from members that banks are dropping their fixed lending rates but proving slower at cutting their floating and overdraft rates," said Alasdair Thompson, EMA's chief executive.

"When loan periods end many borrowers are now letting their loans go onto the floating rate as they expect interest rates to go down further still, but floating rates are tending not to come down as fast.

"Also of course, cuts to fixed rates don't take effect until the end of a fixed loan period."

ENDS

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