INDEPENDENT NEWS

Official Cash Rate unchanged at 1.75 percent

Published: Wed 13 Feb 2019 02:27 PM
Date: 13 February 2019
Official Cash Rate unchanged at 1.75 percent
Statement by Reserve Bank Governor Adrian Orr:
Tena koutou katoa, welcome all.
The Official Cash Rate (OCR) remains at 1.75 percent. We expect to keep the OCR at this level through 2019 and 2020. The direction of our next OCR move could be up or down.
Employment is near its maximum sustainable level. However, core consumer price inflation remains below our 2 percent target mid-point, necessitating continued supportive monetary policy.
Trading-partner growth is expected to further moderate in 2019 and global commodity prices have already softened, reducing the tailwind that New Zealand economic activity has benefited from. The risk of a sharper downturn in trading-partner growth has also heightened over recent months.
Despite the weaker global impetus, we expect low interest rates and government spending to support a pick-up in New Zealand’s GDP growth over 2019. Low interest rates, and continued employment growth, should support household spending and business investment. Government spending on infrastructure and housing also supports domestic demand.
As capacity pressures build, consumer price inflation is expected to rise to around the mid-point of our target range at 2 percent.
There are upside and downside risks to this outlook. A more pronounced global downturn could weigh on domestic demand, but inflation could rise faster if firms pass on cost increases to prices to a greater extent.
We will keep the OCR at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low and stable inflation.
Meitaki, thanks.
More information: Monetary Policy Statement

Next in Business, Science, and Tech

Crown to seek clarity through appeal of High Court decision
By: New Zealand Government
Better safeguards for Commercial Video On-Demand viewers
By: New Zealand Government
Inland Revenue and ACC calling ‘time’ on cheques.
By: Inland Revenue Department
Growing New Zealand’s Capital Markets 2029
By: Baldwin Boyle Group
Aalls for more funding to stop plague of wallabies
By: Forest And Bird
COMMENT: Retail shareholder perspective missing from review
By: BusinessDesk
Regulators and NZSA welcome capital markets recommendations
By: BusinessDesk
Change tax regime for KiwiSaver, capital markets review
By: BusinessDesk
Government welcomes Capital Markets 2029 Report
By: New Zealand Government
Time for a frank discussion about capital markets
By: New Zealand National Party
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media