Reserve Bank: we’re ready to cut


PHOTO: CAMERON BURNELL/STUFF – Dr John McDermott, chief economist and assistant governor of the Reserve Bank of New Zealand, has suggested the central bank is more willing to cut interest rates than economists who monitor the bank seem to believe.

A top Reserve Bank official has dismissed criticism from bank economists about his forecasts as “nonsense” saying the bank is ready to cut interest rates if growth lags.

On Thursday both Westpac and ASB accused the Reserve Bank of being too optimistic in its forecasts for economic growth.

But Dr John McDermott, the Reserve Bank’s chief economist for the past decade said the bank economists appeared to misunderstand the process creating Reserve Bank’s forecasts.


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