Parties Should Support RBNZ Amendment Bill To Select Committee – 23 August
The New Zealand Manufacturers and Exporters Association (NZMEA) is encouraging political parties to support the RBNZ
Amendment Bill to the select committee stage. The Bill proposes changing the wording on the primary function of the
Reserve Bank
This is the proposed wording:
“The primary function of the Bank is to formulate and implement monetary policy directed to the economic objective of
maintaining stability in the general level of prices while maintaining an exchange rate that is conducive to real export
growth and job creation.”
NZMEA Chief Executive John Walley says, “Across the political spectrum we have agreement that the New Zealand Dollar is
too high and volatile. Supporting this Bill through to the select committee stage will create open debate on the issue
and perhaps some action will follow. The world is a different place today than it was in 2007 when monetary policy was
last reviewed.”
“The changes to the Reserve Bank Act need to be debated - what are the targets, what are the mechanisms, how will the
decisions be made, who will make those decisions and how will the Reserve Bank board be constituted. All political
parties should support the Bill through to a select committee phase and front up to the arguments. What we have at the
moment is not working.”
“A number of central banks around the world have taken action to prevent the overvaluation of their currency so there is
now plenty of international evidence to call on. The United States Federal Reserve has just announced it is likely to
have another round of quantitative easing, Canada has introduced loan to value ratios to prevent demand for household
debt from pushing up their currency and Switzerland has been intervening for over a year to lower the value of their
currency.”
“Lowering the exchange rate is the precursor to balancing the economy through export growth. Openly exploring options on
how to achieve this has to start somewhere.”
ENDS