NZ OCR Unchanged

October 30, 2009 New Zealand Finance

The New Zealand Official Cash Rate (OCR) remains unchanged, as of its 29th of October review.

On the 29th of October it was revealed that the Reserve Bank of New Zealand has decided to maintain the New Zealand OCR at 2.5%. The review was the fourth which had led to an unchanged OCR, the last alteration being on the 12th of March 2009.

According to Alan Bollard, Reserve Bank Governor, there seemed to be no reason to withdraw the monetary policy stimulus. Further, New Zealand’s inflation is currently on par with the Reserve Bank’s 1-3% inflation aim. Although it was stated by the Reserve Bank Governor that the current level of the New Zealand dollar is hindering the countries recovery. He said “The high level of the New Zealand dollar has limited the scope for exports to contribute to the recovery and reinforces a bias toward domestic expenditure,” Bollard said. “The current composition of growth continues to raise questions about its sustainability. These concerns would intensify if credit growth began to propel stronger domestic demand.”