Oct 8, 2008

Will Bollard Match The Aussies

There is much speculation in print and on radio that the Reserve Bank will have to match Australia's move in dropping the cash rate by 100 points. Here is the Dominion Post's coverage

ANZ bank chief economist Cameron Bagrie said the Reserve Bank could cut its official cash rate by the same amount as Australia, from the current 7.5 per cent, in coming days.
"It's going to be a case of riding in Kanga's pouch. I think we're going to see 100 basis points by the end of the month here as well in New Zealand," Mr Bagrie said.
"The story here is the environment has changed so much that [the feeling is] don't dilly-dally around ... I wouldn't rule out a move in the next 48 hours."
New Zealand's currency tumbled earlier yesterday as panic gripped markets. Stocks plunged as investors retreated to safe-haven assets, including the US dollar.

If Bollard wanted to be really bold he would go to 600.