Reserve Bank Governor Alan Bollard has downplayed talked of an emergency cut in the Official Cash Rate (OCR) because of turmoil on global financial markets, pointing instead to the regular October 23 announcement date as the day when any changes might be made. Bollard told Radio New Zealand National in an interview this morning that the OCR was used to respond to longer term economic influences. Asked if an emergency rate cut was needed, Bollard said: "We think things are serious and significantly unpleasant in the Northern Hemisphere financial sectors. They're not so bad in the world economy as yet. We're trying to judge the short term affects from the financial turbulence we're seeing." "That's not the sort of thing that the official cash rate would respond to. The OCR would respond to a very strong or weak economy with inflation pressures or otherwise, and that's what we'll put into our judgment in our next OCR consideration. We're not looking at that at the minute," Bollard said. Asked later how New Zealand's position compared with other central banks and whether it could pump cash into money markets or cut interest rates, he said: "We think we're in a reasonable position from a monetary policy point of view. In contrast to most central banks around the world, we really pushed rates up during the very, very hot times. Now we can push them down. We've got quite a way we can move them if we need to."
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