The inquiry into the possible OCR leak

I see that Stuff has an article up about the Reserve Bank’s inquiry into the possible leak of the OCR decision.

Michael Reddell, a former senior economist at the Reserve Bank, who now runs a blog which has been sharply critical of the central bank, claims he was told that the official cash rate (OCR) would be cut an hour before the decision was announced.

The Reserve Bank has confirmed that following an allegation, it had launched an investigation.

“We are aware of an allegation that information may have been leaked ahead of the OCR announcement on 10 March,” a spokesman of the bank said.

There is no “claims” about it. I have given a copy of the email (minus the name of the sender) I received at 8:04am on the OCR release day to the Reserve Bank’s inquiry.  That email read as follows:

We have just heard that the Reserve Bank is cutting by 25 basis points.

I have been consistently clear that the email in its own right is not confirmation that a leak occurred,  but it is troubling nonetheless, and raises the serious possibility of a leak.  When I drew the matter to the attention of the Reserve Bank, they also expressed immediate concern and appropriately moved to initiate an inquiry.

When I first received the email, I was not sure what to make of it.  I checked the exchange rate pages and was relieved to find there had been no movement.  I also wasn’t sure whether to believe the report  –  after all, a cut was not widely expected that day.  Seeing no movement in the exchange rate, not being sure if the report was accurate (and not wanting to be scoffed at by the Bank if they weren’t in fact cutting), and knowing that the key Reserve Bank people would in any case  be in lock-ups, I did not pass on the information to the Reserve Bank (John McDermott and Mike Hannah) until shortly after 9am on MPS day.

I still fervently hope that the investigation is able firmly to conclude that no leak occurred.  Regardless of whether it did or not, the risk of leaks remains and the Bank would be wise to tighten up its procedures and further reduce the risks.




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