And Jenny Morel should know!
Sorry that was inappropriate.
Reserve bank governor Alan Bollard this morning raised the OCR to the unprecedented level of 8%.
This will continue the difficulties for our exporters, especially those manufacturing here in New Zealand – a bad look given that 2007 is Export year.
Bollard had little option – the OCR is very much a blunt instrument but it’s the only one he has. While his terms of agreement required him to keep inflation in check, and the OCR (and related policy statements) are the only tools he has to control said inflation, he can but keep raiding the rate.
Already our rates are higher than anywhere else in the galaxy and this will only increase the pressure on the exchange rates and exporters. And all because us kiwis keep borrowing and spending.
Good answers anyone?
