Interest rate
The governor of Reserve Bank of New Zealand Alan Bollard will announce the decision about the interest rate on Thursday 08 December 05.Half of New Zealand is waiting with anxiety his decision .He is widely expected to raise it by 25 cents .
Reading between the lines his statement at the time of last rate rise in October 05 and his public comments since I however personally believed until last week that he would increase it by 50 cents .Not any more .He can not afford to raise it by more than 25 cents.
Expecting the hike the foreign investors are buying NZ dollars in large quantity pushing the NZ dollar at unrealistically higher level and this is hurting exporters .The exporters are also coming under pressure from softening of commodities prices in the world market.
Ballard can not ignore their plight.The Stock Exchanges are the first to sense and discount the future economic situation .The NZX index is continuously falling for last some days indicating difficult economic situation in short to middle term.
There was another bad news today.A major international credit rating agency has hinted at lowering of NZ' s credit rating mainly due to continuos adverse current account situation.
All in all Bollard will raise the rate .He wants to halt the boom in house prices which are at unsustainable high level now .However the rate rise will again be usual 25 cents and no more.
Reading between the lines his statement at the time of last rate rise in October 05 and his public comments since I however personally believed until last week that he would increase it by 50 cents .Not any more .He can not afford to raise it by more than 25 cents.
Expecting the hike the foreign investors are buying NZ dollars in large quantity pushing the NZ dollar at unrealistically higher level and this is hurting exporters .The exporters are also coming under pressure from softening of commodities prices in the world market.
Ballard can not ignore their plight.The Stock Exchanges are the first to sense and discount the future economic situation .The NZX index is continuously falling for last some days indicating difficult economic situation in short to middle term.
There was another bad news today.A major international credit rating agency has hinted at lowering of NZ' s credit rating mainly due to continuos adverse current account situation.
All in all Bollard will raise the rate .He wants to halt the boom in house prices which are at unsustainable high level now .However the rate rise will again be usual 25 cents and no more.
posted by Shyam | 12:45 AM
0 Comments:
Post a Comment
<< Home