Period of OCR stability now needed

Period of OCR stability now needed

Following today’s increase in the OCR, a period of stability would be positive for the economy, says BusinessNZ.

Chief Executive Phil O’Reilly said a pause in the upward trajectory of the OCR was now called for.

“The Reserve Bank has had to balance conflicting pressures in the economy in making today’s decision,” he said.

“Today’s change was well-signalled and has already been priced in, but it does run counter to trends overseas.

“With interest rates in the developed world at near-zero, we need to avoid adding pressure on the New Zealand dollar.”

He said it was a balancing act in the face of conflicting pressures.

“The softening in commodity prices on one hand and record net migration on the other makes it difficult to chart a course forward.

“One thing we can be certain about is the need for spending and regulatory restraint by the Government.

“To rein in inflationary pressures, it’s important that the Government keeps its spending under control and avoids new regulation that imposes added costs on businesses, such as the proposed earthquake strengthening regime.”

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