Media statement Thursday, July 23rd, 2003
OCR adjustment reassuring for money movers
Today's well telegraphed 0.25% adjustment to the Official Cash Rate will reassure international money movers that New
Zealand is a good place to park billions of dollars, says the Employers & Manufacturers Association (Northern).
"Today's 025% adjustment was timid," said EMA's chief executive Alasdair Thompson.
"At 5% our OCR is too high compared to the US rate of 1%, Japan's 0.75%, Australia's 4.75% and likely to drop, and the
Eurozone rate of 3%.
"Our high interest rate attracts international money movers, and their snapping up of kiwi dollars for the short term
returns available.
"That drives up the $NZ at the expense of our exporters, and growth in the New Zealand economy, at a time when inflation
isn't the problem."
ENDS