OCR freeze wel­comed

Matamata Chronicle - - Rural Delivery -

Af­ter last week’s in­crease in the of­fi­cial cash rate and ex­port data for the June quar­ter, Fed­er­ated Farm­ers is re­lieved the OCR is likely ro be on hold for the rest of the year.

‘‘With the ru­ral econ­omy’s sen­ti­ment de­cid­edly bear­ish, an OCR hold is per­haps the best we could hope for,’’ Fed­er­ated Farm­ers pres­i­dent Dr Wil­liam Rolle­ston said.

‘‘Dairy farm­ers are anx­ious about their likely pay­out fol­low­ing falls in in­ter­na­tional dairy prices and a stub­bornly high ex­change rate. This will not be helped by the sea­son­ally ad­justed value of ex­ported goods fall­ing 7.4 per cent in the June quar­ter. Given the drop in farmer con­fi­dence and other eco­nomic de­vel­op­ments, we ac­tu­ally thought there was good case for the OCR to be left un­changed.

‘‘While that’s now aca­demic, the key thing is that the Re­serve Bank has clearly com­mu­ni­cated its in­ten­tion to pause and take stock. This is the right sig­nal.

‘‘ The fact that in­fla­tion re­mains con­tained is help­ful and it has given the Re­serve Bank some breath­ing space.

‘‘We now hope that the Re­serve Bank will be able to keep the OCR on hold for an ex­tended pe­riod. To be able to do that other govern­ment poli­cies need to help rather than hin­der. This means . . . tight con­trol of spend­ing and wider poli­cies around reg­u­la­tion. Ex­porters, whether ICT, tourism or the pri­mary in­dus­tries, need poli­cies to as­sist rather than im­pede pro­duc­tiv­ity and com­pet­i­tive­ness. ‘‘ We hope that the me­dia and com­men­ta­tors will be ex­am­in­ing poli­cies and pledges against this pre­scrip­tion,’’ Rolle­ston said.

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