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Hot Topic NBR Focus: GMO
Hot Topic NBR Focus: GMO
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'Boring' Bollard today - but tomorrow's speech will have more meat

Perhaps Reserve Bank Governor Alan Bollard will have rather more to say tomorrow than he did today.The central bank reviewed the official cash rate this morning and to no-one's surprise the rate was unchanged.What caused a little more comment was the fact

Rob Hosking
Thu, 28 Jan 2010

Perhaps Reserve Bank Governor Alan Bollard will have rather more to say tomorrow than he did today.

The central bank reviewed the official cash rate this morning and to no-one’s surprise the rate was unchanged.

What caused a little more comment was the fact that almost everything else was unchanged as well. The statement recycled whole phrases from the December Monetary Policy Statement.

"Commendably short and boring," was how Bank of New Zealand economist Craig Ebert described this morning's release.

It was a very environmentally friendly statement, one other economist noted dryly. In particular, Dr Bollard stuck to his “no changes to the official cash rate until around the middle of the year” stance.

Partly this is because the economy has done pretty much exactly what the Reserve Bank thought it would do. Growth is slowly coming right, consumer spending is on the moderate mend, inflation is right in the middle of the 1-3% target band, but business expansion is still more a matter of intentions rather than actuality.

But attention is turning to tomorrow’s speech by Dr Bollard to Canterbury manufacturers. This speech is a traditional annual event now and both Dr Bollard and his predecessor, Don Brash, have used to it unburden themselves of their current economic worries.

Dr Bollard’s speech tomorrow will focus on the lessons of the economic crisis but it is also expected to cover how the recovery might play out.

That could have some impact on the currency and interest rates, if he shows more of his thinking than he did with this morning’s statement. 

Rob Hosking
Thu, 28 Jan 2010
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'Boring' Bollard today - but tomorrow's speech will have more meat
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