12 Mar 2009

OCR cut will hurt savers but Reserve Bank is listening - Greypower

12:00 pm on 12 March 2009

Greypower says the latest cut to the Official Cash Rate by the Reserve Bank will hurt superannuitants' investment income by way of lower interest rates.

But the lobby group for over-50's is heartened the views of retirees are being taken onboard.

The Reserve Bank on Thurday lowered the OCR to 3%. It was previously 3.5%. The reduction was the sixth consecutive cut since July 2008 when the rate was 8.25%.

The new rate is the lowest since the OCR was introduced in March 1999, when it was set at 4.5%.

Governor Allan Bollard indicated the cut could have been more, but was not because he's aware that very low rates hurt savers.

Dr Bollard said he's already getting a lot of letters from older people unhappy with lower interest rates.

Greypower says the fact these letters had a bearing on Dr Bollard is pleasing.

The group is encouraging people to continue writing letters to the Reserve Bank expressing their concerns.