Bollard charts own course in interest rise
Reserve Bank governor Alan Bollard will raise interest rates next week.
Monday, September 6th 2004, 8:56AM
by The Landlord
Not a lot in economics is certain, but an increase in the official cash rate by 0.25% or, less likely, 0.5% is pretty much a done deal.More interest will be on how Dr Bollard and his economics team see interest rates over the coming year, and sitting behind that how they think the economy will perform over that time.
The management of monetary policy has undergone a change over recent years. Go back a decade: the country was approaching the top end of an economic boom.
Something similar is happening now -- and the way the central bank is dealing with it is quite different from the 1994-95 period.
Back then though the interest rates were being jacked up much higher than they are now -- they passed the 10% mark at least once.
The difference between then and now shows how much both the New Zealand economy has changed and also how the management of monetary policy has developed.
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