Media Release
3 December 2003

Interest Rates Rise Would Risk Exporters

New Zealand First has warned that exporters will be severely hurt if the Reserve Bank lifts the Official Cash Rate tomorrow.

Leader Rt Hon Winston Peters said that any increase in interest rates will push the value of the Kiwi dollar up further, causing lower returns to exporters and making it harder for them to compete on world markets.

Mr Peters pointed out that the Kiwi dollar had gone up from about US50 cents to US64 cents since January – an appreciation of about 28 percent - and he said this had seriously hurt New Zealand’s international trading position.

“Our terms of trade are in an alarming state and the country is living on an artificial consumer boom created by mass immigration, mainly into Auckland, and a property boom partially created by overseas speculators.

“The governor must surely know that a drastic cut in immigration, combined with an OCR reduction, is what is needed now and he should say so.

“The Reserve Bank must take this into account when it announces the OCR tomorrow,” said Mr Peters.

ENDS

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