Labour has called for an urgent review of Monetary Policy - saying the reaction to today's official cash rate (OCR) cut shows change is needed.

The party's finance spokesman Grant Robertson said today's events demonstrate that "more and more, traditional approaches seem to be broken".

"The immediate lift in the exchange rate following today's announcement, and the indications from trading banks that they will be passing on only a fraction of the cut, raises further questions about the limitations of monetary policy.

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"There is an urgent need to review monetary policy, including the policy targets agreement which is now effectively being ignored by the Reserve Bank, given the heroic assumptions that underpin their attempt to meet it in the long term."

The current policy targets agreement defines price stability as an annual inflation increase between 1 and 3 per cent, with a focus on keeping future average inflation near 2 per cent.

Robertson said National had delegated housing and economic management to the Reserve Bank, and Governor Graeme Wheeler had made clear growth was being propped up by immigration, construction activity, tourism and monetary policy.

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"That isn't a recipe for sustainable long-term productive growth. Bill English needs to get serious about supporting the productive export sector."

Green Party finance spokeswoman Julie Anne Genter said a lack of Government action had meant an OCR cut was unavoidable.

"The critical earning part of our economy - the export and import-competing sectors - are under significant pressure from the high New Zealand dollar.

"The Governor called house price inflation excessive and raised the stakes of a major shock to the economy should house prices correct. National's failure to stop housing speculation and build enough affordable homes is making the wider economy more vulnerable to damaging economic shocks."

Green Party policy is to introduce a capital gains tax that excludes the family home, and ban foreigners from buying land.