Rt Hon Winston Peters
New Zealand First Leader

16 August 2012

Reserve Bank Law Change Would Boost Our Flagging Economy

New Zealand First calls on all political parties to support our Members Bill to amend Reserve Bank rules so it can properly manage our seriously overvalued exchange rate.

Mr Peters says the Reserve Bank of New Zealand (Amending Primary Function of Bank) Amendment Bill would expand the Bank’s focus.

“The historic role of the Reserve Bank is to keep the rate of annual inflation between one and three per cent. It was legislated for in the 1980s during the time of Rogernomics and rampant inflation.

“While the inflation goal remains important, this Bill would provide the Reserve Bank with the flexibility it needs to also promote growth, employment, and boost our struggling export sector.”

Mr Peters says everyone from the International Monetary Fund to local economists agree our exchange rate is seriously overvalued by about 20 per cent.

“It is crippling our international competitiveness and severely distorting and damaging our economic prospects.

“The Bill being drawn from the ballot today provides a golden opportunity to rebalance the New Zealand economy and put us back on a track to prosperity.

“Given the new international economic conditions we face, habitual tinkering will not suffice.

“At long last our Bill will address the fundamentals our export dependent economy so desperately needs,” says Mr Peters.

Copy of the Bill available here.

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