New Zealand Holds Official Cash Rate Steady At 1.75%

The Reserve Bank of New Zealand on Thursday kept its Official Cash Rate at the record low of 1.75 percent for the 14th straight meeting.

The decision was in line with expectations following a 0.25 percent rate cut in November 2016.

The central bank has pared a collective 0.50 percent from its benchmark in the last 22 months, lowering the rate in six of the last 21 meetings after six straight sessions with no change.

GDP growth is expected to pick up through 2019 and the OCR is expected to be unchanged through next year and into 2020, RBNZ Governor Adrian Orr noted.

“Monetary stimulus and population growth underpin household spending and business investment,” Orr said. “Government spending on infrastructure and housing also supports domestic demand. The level of the New Zealand dollar exchange rate will support export earnings.”

Some downside risks persist, he added – including geopolitical risks and unexpected policies pertaining to major trading partners.

“Downside risks to the growth outlook remain,” Orr said. “Weak business sentiment could weigh on growth for longer. Trade tensions remain in some major economies, raising the risk that trade barriers increase and undermine global growth.”
Core consumer prices are expected to gradually rise to the mid-point of the central bank’s target range at 2 percent – although upside risks to the inflation outlook also exist.

“We will look through this volatility as appropriate,” Orr said. “We will keep the OCR at an expansionary level for a considerable period to contribute to maximizing sustainable employment and maintaining low and stable inflation.”

The material has been provided by InstaForex Company –

Source:: New Zealand Holds Official Cash Rate Steady At 1.75%

Won't your trader friends like this?
About the Author
InstaForex brand was created in 2007 and at the moment it’s a top choice of more than 2,000,000 traders. More than 1,000 clients open accounts with InstaForex every day. All InstaForex clients get great opportunities for effective trading on the forex market, as well as on-time technical and customer support

Leave a Reply