Andrew Dickens: The Reserve Bank can't wait around any longer to cut the OCR

Early Edition with Ryan Bridge

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2d ago 1:35

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So yesterday I outlined the reasons why the Reserve Bank might not cut interest rates.

I got that wrong.

They chopped the rate by the expected half a percent with immediate relief for mortgage holders.

What we try to do with the Reserve Bank is read behind the lines and figure out what they freely mean for our day-to-day life.

This is what I think they’re saying, times have been tough.

But you’ve been sitting on that couch for 15 years.

You wanted to replace it 5 years ago, but everything went so crazy that you called tai hoa until times were better.

The Reserve Bank then says times are as good as you’re going to get anytime soon so buy that couch.

But please buy a New Zealand made one.

They admit there are future risks, but they promise to keep a close eye on it.

We’ve got a furlough. So, let’s get cracking.

We can wait for the government to tell us what to do.

But that’s not the New Zealand way.

We need to work for every dollar we can find but we must also realise that the dollars we’ve got need to be in the washing machine, that is our monetary system.

And that's exactly what the Reserve Bank is hoping for.

That we will loosen the strings around our purse book and spending will increase as the year goes on.

Meanwhile we hope and pray that global conditions treat us kindly.

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