The Official Cash Rate (OCR) has remained unchanged at 1.75%, the Reserve Bank of New Zealand has announced today.
Reserve Bank governor Adrian Orr said he expects to keep the OCR at this level through 2019 and into 2020, and the direction of the next OCR move could be up or down.
The announcement is in line with economist expectations across all major banks, which have predicted that the OCR will not change until early or mid-2020.
Commenting on the decision, CoreLogic senior analyst Kelvin Davidson says it comes as “no surprise,” but that an OCR cut earlier than 2020 could still be a possibility, especially given the recent uptick in business confidence.
“To our minds, there was little in the statement to alter the expectation that the OCR will be on hold until 2020 with the next change being a rise,” Davidson said.
“When the eventual first OCR increase actually comes through, it may carry a degree of “shock and awe.” If it doesn’t happen until the second half of 2020, it would be six years since the previous time it was raised, in July 2014.”