Reserve Bank of New Zealand
May 10, 2018
A more dovish than expected statement released after New Zealand’s official cash rate (OCR) was kept at 1.75% predicts that “a considerable period of time” will pass before the OCR is raised and even asserts that, “The direction of our next move is equally balanced, up or down. Only time and events will tell.” Seven reductions from June 2015 to November 2016 previously halved the OCR to its current level. Inflation is running below the target midpoint of 2% due to low food price pressure, subdued wage growth, and tepid import prices. But GDP and jobs are expanding close to trend, and the baseline expectation seeks a gradual return of inflation to 2%.
Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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