Reserve Bank of New Zealand Retains 1.75% Official Cash Rate as Expected
August 9, 2017
The last of seven straight 25-basis point interest rate cuts was implemented eight months. This cycle began in June 2015 after nearly a year in which the official cash rate crested at 3.5%. A released statement, like the one before released in June, suggests the policy bias in the short term leans toward further ease. Recent growth was weaker than expected. The kiwi has risen in trade-weighted terms since the June policy review, and the economy needs a lower, not a higher, exchange rate to promote needed economic rebalancing. CPI inflation is in target, and house price inflation has moderated. The last sentence reiterates that “monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly.”
copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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