RBNZ Governor Bollard says he was not pressured by govt to cut OCR; Met with Finance Minister to discuss quake responses

RBNZ Governor Bollard says he was not pressured by govt to cut OCR; Met with Finance Minister to discuss quake responses

By Alex Tarrant

Reserve Bank Governor Alan Bollard says the central bank did not come under any pressure from the government to cut the Official Cash Rate in the run up to today’s move to cut the benchmark interest rate by 50 basis points to 2.5%.

Bollard instigated a meeting with Finance Minister Bill English in the wake of the quake to discuss the RBNZ’s view on monetary conditions and government’s view on fiscal responses. This was a one-off decision due to the state of emergency that had been declared, Bollard said.

Prime Minister John Key said publicly in the week before today’s move that lower interest rates would be helpful for the economy in the wake of the devastating earthquake in Christchurch on February 22.

Opposition leader Phil Goff replied by saying it may have been interpreted that Key could have been signalling to the RBNZ Governor what to do, although Goff conceded it was acceptable to make the general comment that lower interest rates would be good at a time the economy was heading back into recession.

See Key's and Goff's comments here.

Bollard said the RBNZ “observed and read what the Prime Minister said”.

“Actually he said he read what the markets were saying and repeated that,” Bollard told media at the Reserve Bank this morning.

“We’ve had no pressure from the Prime Minister or the Minister of Finance at all on this matter, so no, we haven’t felt pressured about that. But I would like to say one thing, which is, we have changed our process a little bit this time, given that we are in a state of national emergency,” he said.

“It was my view that we should consult with the Minister of Finance and co-ordinate as much as possible our views on monetary conditions, and the Minister’s views on fiscal responses and other packages in order that New Zealand was getting the best [response] in a co-ordinated way from both sides of the economic agency spectrum, and that’s what we’ve done.

“Now that is unusual, but the decision is entirely mine and the responsibility for it remains mine. We would expect that to be a one-off while this state of emergency lasts,” Bollard said.

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7 Comments

Bollard should've been more honest and said, "I was not pressured, but Bill English and I are incapable of thinking outside the box, therefore we will continue to implement outdated policies and useless tools because frankly we just have no idea what else to do".

Funny that.  Helen said the same thing when we sent troops to Afghanistan, we weren't pressured by the yanks

"I was not pressured by the Govt " Allan Bollard

Finally a statement right up there with..."I am not a crook"..Nixon

                                                                   ..."I did not have sex with that woman" Clinton

                                                    ....We know there are wepons of mass destruction...Bush

                                 "I am not interested in the baubles of power" our very own Winston P.

i mean you gotta laugh aint you......this git thinks you are stupid or is way past giving a flying f*&k what you think.

 and hello all you fantastic people there at int.co.nz....been busy with the revolution...a lot easier than I thought really...

Bollard deserves a Tui billboard prize!

Alan does what he is told. You can't blame him for doing so. The banks screamed for fatter margins...cheaper deposits...covered bond sales...relaxed regs....

Why should he give a rat's about inflation destroying people's savings...not going to harm him..watch as his salary jumps to another cloud level

Key thinks inflation is just great...he thinks it will erradicate the mountain of household debt...why apply policy that robs you of votes when you have the RBNZ to take the pain away

Bollard tells the world he was not pressured by govt.....he sure as hell was pressured by the banks though...and they run the country as we know.

Settle back folks cos we are in for ten years of stagflation...no need to buy stuff now when you know it will be cheaper later on...bugger borrowing when you know rates will rise and kill you...off to aus if you have a chance to earn more save more.

Some bastard landlords in Chch are cashing in on the quake...watch as the building firms and suppliers do the same bloody thing...not just in Chch but everywhere. Slap on top the higher freighting costs thanks to the falling Kiwi$ in decline due to Bollard...it's a great time NOT to be building.

Bollard is reported to have said    "We're about to have the biggest construction project in New Zealand's history."

 .....what he left out was the bit about the "biggest price rises for materials and labour and council fees .. plus gst... in NZs history" 

Glad you said it Wally.

It has been suggested that I get a start to my design career by seeking work down there, which on the face of it isn't a bad idea. I could actually offer a design and build package.

But I don't know about getting involved with the scalping that will go on.

They should keep Fletchers well clear of the place.

The RBNZ is clueless and corrupt! Make the banks more $$$ at all times is their motto. "Independent" my ass!

Bollard, your a dork who's only fooling the sheeple of this  country which I guess is all the government expects you too do for them.