Ratio reaction
The Government’s decision to abolish the reserve asset ratio system has been criticised by the Opposition. The Opposition spokesman on finance, Mr Birch, said there was no point to the ratio decision as the Government would have to continue to lead the market to finance its deficit. “I have no doubt that that is the advice which the Labour Government is getting from the Reserve
Bank,’’ said Mr Birch. The requirement to invest in Government stock or other public securities had no useful meaning when the Government offered the highest interest rates in the market, as was now the case.
“The financial institutions' are now operating in a market which is led by the Government and high interest rates are the result,” he said.
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Press, 8 February 1985, Page 3
Word Count
126Ratio reaction Press, 8 February 1985, Page 3
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