Rates ‘manipulated’ for political gain

Press, 12 June 1987, Page 26

Rates ‘manipulated’ for political gain

PA Wellington Federated Farmers is accusing the Government of. manipulating interest rates for political advantage. The president, Mr Peter Elworthy, was commenting on the Reserve Bank’s decision to intervene in the money market to slow the fall in interest rates. "Such action contradicts the Government’s policy of letting the market determine interest rates” he said.

“Government policy has forced interest rates to record highs, and from this most recent Reserve Bank action it appears that it is not prepared to

let them fall to the market rate.

“It is also disturbing to see trading banks applauding the decision, rather than adopting a positive attitude toward driving interest rates down.

“The fact that some have announced that interest rates will drop by 1 per cent on June 15 smacks of collusion.” The sustained high rates of interest were the most crippling costs facing farmers, Mr Elworthy said.

For farming to survive, it was imperative that interest rates fall quickly, he said.