Rates rise strengthens need for Reserve bank rewrite
While the Reserve Bank Governor’s decision to lift the Official Cash Rate may have been considered inevitable in some quarters, it underlines the need for a review of the Reserve Bank Act, according to New Zealand First Economic Development spokesman Doug Woolerton.
"The difficulties associated with using the Official Cash Rate as the major monetary tool to control the economy is apparent in Dr Bollard’s decision to lift the OCR yet again," said Mr Woolerton.
"The Reserve Bank must be required to look at more than just inflation. Export and growth targets are just as important.
"The challenge is clearly on the Government to amend the legislation and enable the development of a more flexible set of monetary policy tools. This myopic focus on interest rates must stop," said Mr Woolerton.
"The difficulties associated with using the Official Cash Rate as the major monetary tool to control the economy is apparent in Dr Bollard’s decision to lift the OCR yet again," said Mr Woolerton.
"The Reserve Bank must be required to look at more than just inflation. Export and growth targets are just as important.
"The challenge is clearly on the Government to amend the legislation and enable the development of a more flexible set of monetary policy tools. This myopic focus on interest rates must stop," said Mr Woolerton.