7 Dec 2008

Manufacturers call for further interest rate cut

8:51 am on 7 December 2008

Banks are being urged by a manufacturers group to pass on the full extent of recent falls in official interest rates.

The Reserve Bank lowered the Official Cash Rate to 5% on Thursday.

But John Walley, of the Manufacturers and Exporters Association, says businesses need to receive the full benefit, given that the banks have been given deposit protection by the government.

Mr Walley says New Zealand's official cash rate remains several per cent higher than its northern hemisphere trading partners, and it needs to drop closer to the rate of 2% in England and Europe.

Mr Walley says the call is not an attempt to lower the value of the New Zealand dollar, because Thursday's sharp drop of the Official Cash Rate did not materially affect the value of the currency.