OCR unchanged at 3.0 percent - Te Pūtea Matua
Central bank: rbnz | Type: statement | Date: 2011-01-01

OCR unchanged at 3.0 percent
Published:
27 January 2011
The Reserve Bank today left the
Official Cash Rate (OCR) unchanged at 3.0 percent.
Reserve Bank Governor Alan Bollard said: "The outlook for the New
Zealand economy remains consistent with the projections underlying the December
Monetary Policy Statement
"Domestic economic activity was weaker than forecast through the second
half of 2010. September quarter GDP declined unexpectedly, and retail spending
appears to have fallen in the December quarter.
"Forward indicators of activity have firmed somewhat. Trading partner
activity continues to expand and New Zealand's export commodity prices
have increased further. Within New Zealand, business confidence, across a range
of industries, has picked up and imports of capital equipment have grown.
Furthermore, there are tentative signs that housing market activity has
stabilised, after having trended lower for some months.
"The recent increase in the rate of GST has caused headline CPI
inflation to spike higher as expected, but underlying inflation remains
comfortably inside the target band.
"As noted previously, while interest rates are likely to increase
modestly over the next two years, for now it seems prudent to keep the OCR low
until the recovery becomes more robust and underlying inflationary pressures
show more obvious signs of increasing."
Media contact:
Mike Hannah
Head of Communications
Ph 04 4713671, 021
mike.hannah@rbnz.govt.nz