New Zealand keeps OCR at 2.5%

The Reserve Bank of New Zealand has announced that it is leaving the Official Cash Rate (OCR) unchanged at 2.5%. Governor Alan Bollard described inflation as constrained and forecast that it would remain around the centre of the target range. Governor Bollard went on to say that New Zealand’s economy was showing signs of recovery but warned that the global situation remained concerning. He added that the New Zealand dollar was still strong and that if this continued (without any other changes) the Reserve Bank would have to reassess its monetary policy. The New Zealand rate of interest has now been unchanged for over a year, and the British interest rate (a record low of 0.5%) has also been unchanged for a prolonged period.