Story: Reserve Bank

This cartoon explores how changes made to the official cash rate by the Reserve Bank affect borrowers and savers differently. In late January 2009 Reserve Bank Governor Alan Bollard (holding the whip) cut the official cash rate to 3.5%, which was the lowest it had been since it was first introduced in 1999. This was good for borrowers, but not for savers because it led to a drop in interest rates. The overworked savers are being assured that their financial pain will benefit the wider economy.