OCR unchanged at 3.0 percent - Te Pūtea Matua
Central bank: rbnz | Type: statement | Date: 2010-10-01

OCR unchanged at 3.0 percent
Published:
28 October 2010
The Reserve Bank today left the
Official Cash Rate (OCR) unchanged at 3.0 percent.
Reserve Bank Governor Alan Bollard said: "Despite some data turning out
weaker than projected, the medium-term outlook for the New Zealand economy
remains broadly in line with that assumed at the time of the September
Monetary Policy Statement
"Downside risks to the outlook for global growth continue, with high
public and private debt inhibiting recovery in many developed economies.
Moreover, it is unclear how further policy support would impact on the outlook
for growth in our Western trading partners. Offsetting this weakness, strong
growth continues in China, Australia and emerging Asia.
"Domestically, recent data has turned out weaker than projected.
Continued household caution has seen consumer spending and housing market
activity remain muted, and many firms have become less optimistic about their
future prospects. However, continued high export prices, along with
reconstruction and repairs in Canterbury, will support activity over the coming
"Overall, continued GDP growth is expected to gradually absorb current
surplus capacity over the next few years. Headline inflation is expected to move
higher following the recent increase in the rate of GST. The subdued state of
domestic demand suggests this inflation spike will have limited impact on
medium-term inflation expectations.
"While it is appropriate to keep the OCR on hold today, it remains
likely that further removal of monetary policy support will be required at some
Media contact:
Mike Hannah
Head of Communications
Ph 04 4713671, 021
mike.hannah@rbnz.govt.nz