Today’s drop in the Official Cash Rate (OCR) has been hailed as the right move in the current economic climate by the Employers and Manufacturers Association.
The Reserve Bank reduced the OCR by 25 basis points to 2.75%.
Banks were quick to follow in reducing their lending rates on mortgages, while the dollar dipped on the news.
EMA chief executive Kim Campbell says the much anticipated drop was in keeping with the EMA’s call to keep the country’s economy competitive.
“We think this is good news for our members and keeps us on a steady economic keel,” says Campbell.
He says the economic fundamentals remain stable and he would expect it to continue in this direction – with growth at two percent and inflation still below target.
“Obviously, today’s announcement is excellent news for our exporters,” he explains. “We’ve seen some sectors improve markedly over the past few months, as was evidenced in the most recent July trade figures, with meat and fruit leading the way.
“Tourism is also performing extremely well at present, contributing around four percent to our gross domestic product.”
“Imported goods rose in July by 4.8% compared with a year earlier. While there is some inflation being experienced, it’s manageable,” says Campbell.
