‘Liquidity key to strategy’

Press, 14 November 1984, Page 34

‘Liquidity key to strategy’

PA Wellington The success of the Government’s economic strategy will be considerably influenced by-its ability to maintain central control of domestic liquidity, the general manager of the Bank of New Zealand, Mr Bill Shaw, said yesterday.

“This will not be made easier by any large-scale capital or investment flows coming into the country, or alternatively, withdrawing. The Government will need to exercise skill and agility in controlling the money supply,” he said in an interview.

. “The budget gave us a' good deal of encouragement for the medium to longer term,” he said.

Mr Shaw said that it was inevitable that a change of

direction of such magnitude would cause some pain generally, and in some sectors in paticular. “I have in mind the farming community especially.” The bank, he said, would be looking to help those of its customers most adversely affected in the short term.

The government’s fiscal policy into the medium term demonstrated that it was determined to restore economic balance. “I know that the measures announced and the signals given will be well received by the international banking community and overseas investors. It would not surprise me if we experienced an increasing flow of investment into New Zealand from overseas sources,” he said.