Business calls on Reserve Bank to cut OCR to give exporters a break

After today’s CPI figure we expect the Reserve Bank to cut the Official Cash Rate on October 25th in an effort to lower the exchange rate, the Employers and Manufacturers Association says.

“The CPI figure indicates inflation has moved below the agreed target of 1-3 per cent required of the Reserve Bank leaving ample room for a cut to the OCR,” said Kim Campbell, EMA’s chief executive.

“We need the Reserve Bank to do what it can to give exporters a break and stimulate the economy,” he said.

“This is the second consecutive quarter showing annual inflation running at or below 1 per cent and the trend is still downward.

“In fact there was deflation in the tradables sector over the past year to September of 1.2 per cent.

“With the economy flat as a plate and with some businesses in a perilous condition, our exporters need a cut to the OCR to help spur investment but mainly to retain the cross rate advantage we have had for exports going to Australia.

“Other countries around the world are cutting their interest rates where they can while those at or very close to zero are printing money through quantitative easing in an effort to support their economies.

“A cut to the OCR on October 25th, the date when the Reserve Bank is due to report again, would underpin business confidence and show monetary policy works.”