Anderton attacks high interest rates
By
BRENDON BURNS
in Wellington
High interest rates were caused by Government policy, said Mr Jim Anderton in. his maiden speech as New Labour’s only member of Parliament.
He said the Reserve Bank, acting on Government advice had the caoacitv to set short-term
interest rates and influence longer term rates. Mr Anderton criticised the imposition of a 1.5 per cent penalty on trading banks for the purchase of Reserve Bank bills to meet daily settlement balances. He said the rate was excessively high having been set in October, 1987, when short-term interest rates were 20.5 per cent.
A penalty rate of 0.5 per cent was said to be appropriate now that short-term rates were 13.5 per cent.
Mr Anderton said trading banks were largely correct in saying the Reserve Bank was holding up interest rates.
“The Government is responsible and must therefore accept the blame for its own policy,” he said.
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Press, 19 May 1989, Page 5
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156Anderton attacks high interest rates Press, 19 May 1989, Page 5
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