New Zealand: Central Bank leaves rates unchanged
June 14, 2012
At its 14 June monetary policy meeting, the Reserve Bank of New Zealand (RBNZ) maintained the official cash rate (OCR) unchanged at a record-low 2.50%. Although the decision was widely expected by the market, analysts were focusing on the Bank's statement, as the Reserve Bank of Australia had recently cut interest rates. The Bank's decision means that monetary authorities have now remained on hold for 15 months, as weaker global economic growth and rising uncertainty in Europe will weigh on the economic outlook for New Zealand. That said, the RBNZ pointed out that rising housing activity, due to low interest rates and reconstruction in Canterbury are expected to temporarily offset the negative impacts from a deterioration in the Eurozone and lower global commodity prices.
Author: Ricardo Aceves, Senior Economist