OCR unchanged at 3.5 percent - Te Pūtea Matua
Central bank: rbnz | Type: statement | Date: 2014-10-01

OCR unchanged at 3.5 percent
The Reserve Bank today left the Official Cash Rate unchanged at 3.5 percent.
Published:
30 October 2014
Statement issued by Reserve Bank Governor Graeme
The Reserve Bank today left the Official Cash Rate unchanged at 3.5
The global economy is growing at a moderate rate although recent data
suggests some softening in the major economies, apart from the United States.
Monetary policy is expected to remain supportive for longer in all the major
economies.
Growth in the New Zealand economy has been faster than trend over 2014,
reducing unemployment and adding to demands on productive capacity. Strong
construction sector activity, high net immigration, and interest rates, which
remain low by historic standards, continue to support the expansion. Output
growth is expected to moderate over coming years, towards a more sustainable
Lower commodity prices and increased global financial market volatility have
taken some pressure off the New Zealand dollar. However, its current level
remains unjustified and unsustainable and continues to constrain growth in the
tradables sector. We expect a further significant depreciation.
CPI inflation remains modest, and was 1 percent in the
year to September. Contributing factors are subdued wage inflation,
well-anchored inflation expectations, weak global inflation, falls in oil
prices, and the high New Zealand dollar. House price inflation has fallen
significantly since late-2013, in part due to interest rate increases and the
LVR restrictions.
The economy appears to be adjusting to the policy measures undertaken by the
Bank over the past year. CPI inflation is currently at a low level despite
above-trend growth. However, inflation is expected to increase as the expansion
continues. A period of assessment remains appropriate before considering
further policy adjustment.
Media Contact:
Mike Hannah, Head of
Communications
Ph: 04 471 3671; mob: 021 497 418,
mike.hannah@rbnz.govt.nz