| Business News | Friday April 27 2012 11:07
The market's been surprised by Allan Bollard's threat to cut interest rates if the dollar doesn't drop. Final
The Reserve Bank changed its language yesterday in announcing the OCR would remain on hold at a record low 2.5 percent.
Business correspondent Roger Kerr says monetary conditions are too tight for the economic outlook and Dr Bollard believes reducing interest rates would re-balance that.
"The problem with Mr Bollard's strategy is that no one really believes he will cut interest rates, not when you've got potentially growth and inflation getting near three percent and the housing markets starting to pick up."
Mr Kerr says exporters share the Reserve Bank's concern that the high dollar is hampering an export-led recovery.
Photo: NZ Herald