RBNZ leaves OCR
(27 April 2016 – New Zealand) The New Zealand Reserve Bank (NZRB) kept the official cash rate at 2.25 percent.
In a statement, the central bank’s governer, Graham Wheeler said "We expect inflation to strengthen as the effects of low oil prices drop out and as capacity pressures gradually build."
"Monetary policy will continue to be accommodative. Further policy easing may be required to ensure that future average inflation settles near the middle of the target range,” he said.
The RBNZ has unsuccessfully tried to spur domestic inflation as kiwi dollar maintained its price and cheap oil kept prices down.
In his statement, Wheeler said the kiwi dollar was "higher than appropriate" considering the decrease in the country’s commodity export prices, and that "a lower New Zealand dollar is desirable to boost tradables inflation and assist the tradables sector".
The decision by European and Japanese central banks to continue monetary expansion programs, and the US unwilling to raise rates further complicated the situation for the RBNZ.
"Monetary conditions are extremely accommodative internationally, with considerable quantitative easing and negative policy rates in some countries," Wheeler said.
"Financial market volatility has eased in recent weeks, but markets continue to watch the policy settings of major central banks."
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