Reserve Bank of New Zealand Policy Rate Unchanged

June 22, 2017

From a high of 3.5% between late July 2014 and mid-June 2015, the RBNZ’s official cash rate was cut in half via seven 25-basis point reductions. The last of these occurred in November 2016 and left the OCR at its current 1.75% level. A statement released following the latest policy review defends continuing an accommodative stance “for a considerable period.” Core inflation and wage pressures are low. A rise in headline inflation last quarter is considered temporary, especially with energy slipping again. GDP growth has been lower than assumed because of weaker exports and housing. The final sentence of the statement, reading “numerous uncertainties remain and policy may need to adjust accordingly” suggests that the next OCR change may even be a further cut.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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