The RBNZ announced this morning the OCR will stay at 1.75%
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The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 1.75 percent, citing improvements in global economic growth.
Reserve Bank governor Grant Spencer said while global inflation remains subdued, there are some signs of emerging pressures.
“Commodity prices have increased, although agricultural prices are relatively soft. International bond yields have increased since November but remain relatively low. Equity markets have been strong, although volatility has increased recently. Monetary policy remains easy in the advanced economies but is gradually becoming less stimulatory,” Spencer added.
“GDP growth eased over the second half of 2017 but is expected to strengthen, driven by accommodative monetary policy, a high terms of trade, government spending and population growth. Labour market conditions continue to tighten. Compared to the November Statement, the growth profile is weaker in the near term but stronger in the medium term.
“The Bank has revised its November estimates of the impact of government policies on economic activity based on Treasury’s half year economic and fiscal update. The net impact of these policies has been revised down in the near term. The Kiwibuild programme contributes to residential investment growth from 2019,” Spencer added.
House price inflation has increased somewhat over the past few months but housing credit growth continues to moderate, Spencer said.
Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly, Spencer added.
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