OCR unchanged at 2.5 percent - Te Pūtea Matua
Central bank: rbnz | Type: statement | Date: 2013-04-01

OCR unchanged at 2.5 percent
Published:
24 April 2013
The Reserve Bank today left the Official Cash Rate
(OCR) unchanged at 2.5 percent.
Reserve Bank Governor Graeme Wheeler said: "The outlook for monetary
policy remains consistent with that described in the March
Monetary Policy
"Despite continued strains in Europe and disappointing data in some
countries most recently, global financial market sentiment remains buoyant and
the medium-term outlook for New Zealand's overall trading partner GDP
growth remains firm.
"Growth in the New Zealand economy has picked up. Consumer spending
has increased and rebuild activity in Canterbury is gaining momentum. House
price inflation is high in some regions, despite prices already being elevated.
The Bank does not want to see financial or price stability compromised by
housing demand getting too far ahead of supply.
"Fiscal consolidation is constraining aggregate demand. In addition,
drought has lowered agricultural production and will likely also negatively
affect farm output in the coming season. International dairy prices have spiked
higher in response to the drought, but these price gains could prove
temporary.
"The New Zealand dollar remains overvalued and is higher than projected
in March. Further appreciation has occurred partly in response to the
announcement of a substantial quantitative easing programme in Japan. The high
New Zealand dollar continues to be a significant headwind for the tradables
sector, restricting export earnings and encouraging demand for imports.
"The CPI increased 0.9 percent in the year to the March quarter and is
expected to remain close to the bottom of the target range this year. Weak
near-term inflation prospects need to be balanced against our projection for
inflation to gradually rise towards the 2 percent target midpoint.
"At this point, we expect to keep the OCR unchanged through the end of
the year."
Media contact:
Mike Hannah
Communications
Ph 04 4713671, 021 497418,
mike.hannah@rbnz.govt.nz