OCR unchanged at 2.5 percent - Te Pūtea Matua
Central bank: rbnz | Type: statement | Date: 2011-07-01

OCR unchanged at 2.5 percent
Published:
28 July 2011
The Reserve Bank today left the
Official Cash Rate (OCR) unchanged at 2.5 percent.
Reserve Bank Governor Alan Bollard said: "The economy has grown more
strongly than was expected, and it appears that the recovery is getting back on
track, supported by a strong terms of trade. At the same time, however, current
fragility in global financial markets, including the uncertainty around the US
Government's debt ceiling, continues to highlight the downside risk to
trading partner activity noted in the June
"Annual headline CPI inflation continues to be above the Bank's 1
to 3 percent target band. However, much of the current spike in inflation has
been driven by the October 2010 increase in the rate of GST, and will therefore
be temporary. Wage and price setters should focus on underlying inflation,
which is currently estimated to be below 2.5 percent.
"Provided current global financial risks recede and the economy
continues to recover, the Bank sees little need for the March 2011
‘insurance' cut to remain in place much longer. The current very
high value of the New Zealand dollar is acting as a drag on the New Zealand
economy. If this persists, it is likely to reduce the need for further OCR
increases in the short term."
Media contact:
Mike Hannah
Head of Communications
Ph 04 4713671, 021
mike.hannah@rbnz.govt.nz