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What they're saying about the OCR cut

NZ Newswire logoNZ Newswire 10/08/2016


* "The high exchange rate is adding further pressure to the export and import-competing sectors and, together with low global inflation, is causing negative inflation in the tradables sector. This makes it difficult for the bank to meet its inflation objective. A decline in the exchange rate is needed" - Reserve Bank governor Graeme Wheeler

* "The exchange rate has been stronger than we expected ... New Zealand is one of the most stable places in the developed world and the economy looks like it's going to pick up speed a bit" - Finance Minister Bill English

* "We still have higher interest rates than most developed countries ... I think what the Reserve Bank is basically saying is that the economy is doing extremely well, so there's a lot of good news there" - Prime Minister John Key

* "We continue to expect the RBNZ to cut once further, in November, when the RBNZ has received the next set of key economic data and comprehensively redone its forecasts. Weaker than expected data or persistent NZD strength could bring easing forward to September" - ASB's Nick Tuffley

* "We would have thought what they delivered was at least what the market had expected. It appears that the FX market informally had expected something over and above what interest rates had priced in. My suspicion would be that this reaction doesn't last" - Westpac's Imre Speizer

* "The OCR was cut but it was not enough to satisfy the market, with the NZD up and rates selling off. Expectations were growing prior that we could see something substantial, but what we got was an entirely balanced and appropriate response in our view" - ANZ economists Cameron Bagrie and Philip Borkin

* "With the dollar surging immediately after the OCR announcement it's clear that monetary policy is having limited positive impact for exporters. The government cannot outsource managing the economy to the Reserve Bank, it needs to take concrete steps to ensure hard-pressed exporters can compete internationally" - Labour's finance spokesman Grant Robertson

* "The Reserve Bank has had to show economic leadership because the National government has failed to do so. The critical earning part of our economy - the export and import-competing sectors - are under significant pressure from the high New Zealand dollar" - Green Party finance spokeswoman Julie Anne Genter

* "With the fall in the OCR and possible flow on to mortgage and deposit rates, it is an opportune time to make sure you are making the choices that are right for you. This includes whether or not to consolidate debt, or move around investments" - Commerce and Consumer Affairs Minister Paul Goldsmith

* "Governor Wheeler is damned if he does, and damned if he doesn't. The cut will do nothing to dampen the housing bubble and will have little impact on the exchange rate in a world of ultra low interest rates" - NZ First leader Winston Peters.

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