OCR unchanged at 8.25 percent - Te Pūtea Matua
Central bank: rbnz | Type: statement | Date: 2007-10-01

OCR unchanged at 8.25 percent
Published:
25 October 2007
The Official Cash Rate (OCR) will
remain unchanged at 8.25 percent.
Reserve Bank Governor Alan Bollard said: "The outlook for the New
Zealand economy and interest rates remains broadly consistent with the view
outlined in the September
Monetary Policy Statement
. The labour market
remains tight, domestic income growth continues to expand on the back of strong
commodity prices, and core inflationary pressures persist. On the other hand,
there are signs the housing market is moderating.
"Despite ongoing surpluses in the government's operating balance,
fiscal policy is contributing to inflationary pressure. Any further easing in
fiscal policy beyond that already announced will add further upside risks to
medium-term inflation.
"There are a number of other upside risks to inflation, including the
direct effects of the proposed greenhouse emissions trading scheme and rising
global food prices.
"While the turbulence in global financial markets has eased somewhat,
considerable uncertainty remains. This poses a downside risk for our key
trading partner economies. In addition, the New Zealand dollar remains
relatively high, restraining the externally-focused sectors of the economy.
"We believe that the current level of the OCR remains consistent with
future inflation outcomes of 1 to 3 percent on average over the medium
For further information contact:
Mike Hannah
Communications
Ph 04 4713671, 021 497418,
mike.hannah@rbnz.govt.nz