The Official Cash Rate (OCR) unchanged at 2.5 %

Published: Thu 10 Dec 2009 09:23 AM
Reserve Bank
10 December 2009
The Official Cash Rate (OCR) remains unchanged at 2.5 percent.
Reserve Bank Governor Alan Bollard said: "The New Zealand economy continues to recover but there remains considerable uncertainty about the durability of the expansion.
"Global activity has continued to rebound. Most obviously, activity in Australia, China and emerging Asia continues to increase and solid growth is expected over the next few years.
"The picture is more mixed in the major developed economies. While activity is expanding, sustained growth is not assured. Financial sectors are still impaired in a number of economies and economic activity is still heavily dependent on policy support.
"In New Zealand, the economy continues to recover, reflecting improved world growth, higher export commodity prices, increased government spending and housing strength. A key uncertainty is the extent to which higher house prices are eventually reflected in increased consumer spending. At this point credit growth remains subdued suggesting households are being relatively cautious.
"While business confidence has improved, actual business spending remains weak. In addition, the high level of the New Zealand dollar has limited the scope for exports to contribute to the recovery. After some short-term correction the current account deficit is expected to widen in the future.
"Annual CPI inflation is expected to remain below 2 percent until early 2011 and track within the target range over the medium term.
"The economy is being assisted by both monetary and fiscal policy support. As growth becomes self sustaining, fiscal consolidation would help reduce the work that monetary policy might otherwise need to do.
"If the economy continues to recover, conditions may support beginning to remove monetary stimulus around the middle of 2010. Recent tightening in financial conditions, driven by a higher exchange rate, increased long-term interest rates and a wider gap between the OCR and bank funding costs, reduces the need for more immediate action."
The Monetary Policy Statement can be found at the following link:

Next in Business, Science, and Tech

Sharesies Expands B2B Offering With First Acquisition
By: Sharesies
Contact Empowers Kiwis To Make Positive Changes To Their Energy Habits
By: Contact Energy
Google Cloud Report: A Deep Dive Into The Future Of Cybersecurity
By: Google Cloud
Port Of Auckland Grant A Welcome Boost For Spirit Of Adventure Programme
By: Port of Auckland
Auckland Property Investors Association Welcomes Pending Tenancy Law Changes With Caution
By: Auckland Property Investors Association
Total Greenhouse Gas Emissions Decrease 0.5 Percent In The December 2023 Quarter
By: Statistics New Zealand
View as: DESKTOP | MOBILE © Scoop Media