Interest rates “distorted” – Reserve Bank

Reserve Bank Governor Alan Bollard said this week that long-term interest rate rises were not in line with his expectations. He said “we believe the rise in longer-term interest rates is unwarranted and inconsistent with the monetary policy outlook,” and that this “apparent distortion” continues, it would put further pressure on firms and households.

Finsec Campaigns Director Andrew Campbell said that there needs to be greater public accountability with regards to the setting of interest rates. “There are a series of questions our banks need to answer about their costs of borrowing, and how much profit they are generating as a result of interest rates rises.”

Campbell said that Bollard’s comments show that there are significant concerns about the lack of transparency in interest rate setting that need to be addressed.

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