The Reserve Bank governor, Alan Bollard, said today that the OCR – the Official Cash Rate – will stay the same at 2.5%.
He also talked about the state of the New Zealand economy. He said it was in a “boring state” which was a good thing, especially at a time when so many other countries were in financial trouble. Our trading partners in Europe are weak and China’s economic growth is slowing down. Economic activity will grow moderately in the next few years, especially with the construction in Christchurch. Our main problem is the high Kiwi dollar which makes it hard for exporters and encourages more spending on imports. The New Zealand government has a high debt and New Zealanders do not save enough.
Dr Bollard, who has been in this job for the last 10 years, will leave in two weeks. He will move to a position in the APEC Secretariat in Singapore. His replacement is Graeme Wheeler, a New Zealander who was a senior executive at the World Bank.
Listen to June 14th 2012 to hear more about the Official Cash Rate.
Vocabulary
trading partners – countries we buy from and sell to
economic (adj) from economy (noun); do not confuse this with economical (adj) which means it doesn’t waste money e.g. it’s more economical to take your own lunch to work than to buy it
moderately – not a little and not a lot
construction – building
encourages – makes people want to do this
debt – note pronunciation; the letter b is silent
replacement – the person who will take his place