OCR Unchaged for 13th Time

October 25, 2012 New Zealand Finance

Photo by yum9me
The Reserve Bank announced on October 25th that the Official Cash Rate (OCR) of New Zealand will be left at 2.50 percent for another term.

The latest OCR announcement is the first policy review announced by the new Reserve Bank governor Graeme Wheeler, who took the position following Alan Bollard.

Graeme Wheeler explained that it is appropriate to leave the OCR at 2.5 percent “for now” as “the global economy remains fragile, with further recovery heavily dependent on policy implementation. That said, market sentiment has improved from earlier in the year, suggesting the risks to the global outlook are more balanced.”

The economic conditions in New Zealand were described as mixed, with GDP growth continue at a “modest pace” and the housing market expanding as previously predicted, but consumer demand for local products being constrained by the high New Zealand dollar and continued fiscal consolidation.

The OCR has remained at 2.50 percent since March 10th 2011, when it was dropped by 50 basis points from 3 percent.