NZ’s central bank keeps rates steady
(1 February 2010 – New Zealand) The Reserve Bank of New Zealand made the decision last week to leave its record low interest rate at 2.5 percent; saying that if the economy continues to recover at this pace they hope to remove policy stimulus mid way through the year.
The central bank reaffirmed that it saw no need to raise rates before mid year due to docile inflation, countering speculation that a quickening growth rate may force an earlier tightening.
Reserve Bank, governor, Alan Bollard, said that the outlook for the New Zealand economy remains consistent with the projections underlying in the December Monetary Policy Statement.
The governor added that as global activity continues to recover it is helping push New Zealand’s export commodity prices higher.
Economic growth is most apparent in China, Australia, and emerging Asia. However, sustained growth throughout trading partners is not assured, with many still facing impaired financial sectors and overall activity still reliant on policy support, Mr Bollard said.
The New Zealand economy is continuing to recover, policy stimulus and improving export earnings have seen a pickup in household spending and households remain cautious, with credit growth subdued, Mr Bollard said.
The country’s annual CPI inflation is currently at the centre of the target band, and is expected to track comfortably within the band over the medium term.
The economy is being assisted by both monetary and fiscal policy support. As growth becomes self sustaining, fiscal consolidation would help reduce the work that monetary policy might otherwise need to do.
Reserve Bank, governor, Alan Bollard, said that the outlook for the New Zealand economy remains consistent with the projections underlying in the December Monetary Policy Statement.
The governor added that as global activity continues to recover it is helping push New Zealand’s export commodity prices higher.
Economic growth is most apparent in China, Australia, and emerging Asia. However, sustained growth throughout trading partners is not assured, with many still facing impaired financial sectors and overall activity still reliant on policy support, Mr Bollard said.
The New Zealand economy is continuing to recover, policy stimulus and improving export earnings have seen a pickup in household spending and households remain cautious, with credit growth subdued, Mr Bollard said.
The country’s annual CPI inflation is currently at the centre of the target band, and is expected to track comfortably within the band over the medium term.
The economy is being assisted by both monetary and fiscal policy support. As growth becomes self sustaining, fiscal consolidation would help reduce the work that monetary policy might otherwise need to do.
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