Quote:
quote:3 May 2005
News Release
Reserve Bank reinforces last week's statement
Speech excerpt on monetary policy
From an address by
Dr Alan Bollard
Governor
Reserve Bank
As part of a presentation to a Masterton District Council Business Community Breakfast Meeting
Reserve Bank Governor Alan Bollard today reinforced his statement of 28 April 2005 that economic data suggests that underlying demand and inflation pressures remain strong and that, in this environment, further policy tightening cannot be ruled out.
Dr Bollard was speaking to a Masterton District Council Business Community Breakfast Meeting.
"Last week I announced that the Official Cash rate (OCR) would remain at 6.75 per cent," Dr Bollard said. "But I reiterated our concerns about the persistence of inflation pressures in the economy, which are severely limiting our inflation headroom."
Dr Bollard said that over the coming weeks the Bank would be reviewing its forecasts in more detail, in particular to assess the strength of pipeline interest and exchange rate effects, household demand and ongoing labour market pressures.
"This assessment will be used to confirm whether further policy tightening is warranted at the June 2005 Monetary Policy Statement. Certainly, the current outlook offers no scope for an easing of policy in the foreseeable future."