“Today’s Monetary Policy Statement by the Governor of the Reserve Bank holds few surprises”, said Simon Carlaw Chief
Executive of the New Zealand Manufacturers Federation. Mr Carlaw was commenting on the latest Monetary Policy Statement
which sees the OCR move to 5.75 percent.
“This is perhaps a pity as the Bank’s position seems to have changed little over the past three months despite the
signing of a new Policy Targets
Agreement with the Minister of Finance. The Bank is still looking to respond to short-term economic changes such as an
increase in commodity prices rather than taking a longer term approach to the economy.
“The Reserve Bank still believes the new rate stimulatory but this view flies in the face of declining business
confidence in the manufacturing sector. The Bank is also expecting import growth to decline sharply, but there is little
evidence of this yet with tariff cuts expected on 1 July and ongoing strong growth in imports from China.
“Perhaps most significantly the Reserve Bank does not appear to have built into its forecasts the impact of some new
Government policies on business confidence and investment intentions.”