One can debate whether the 90-day interest rate correctly measures movements in New Zealand interest rates. And I am familiar with all of that debate. (We dealt with several of these issues in the March 1998 Economic Projections, and in my speaking notes for journalists in releasing that document.)
But if we accept, as I believe we must, that in a small, open economy monetary policy works to affect the real economy and, in that way, inflation through both interest rates and the exchange rate, then I don’t have the slightest doubt that overall monetary conditions have eased in New Zealand in recent months, and indeed have eased quite considerably.