Academic journal article The Reserve Bank of New Zealand Bulletin

OCR Reduced to 5.50 per Cent: 24 April 2003. (for the Record: Recent Press Releases)

Academic journal article The Reserve Bank of New Zealand Bulletin

OCR Reduced to 5.50 per Cent: 24 April 2003. (for the Record: Recent Press Releases)

Article excerpt

The Reserve Bank today reduced the Official Cash Rate from 5.75 per cent to 5.50 per cent.

Reserve Bank Governor Alan Bollard commented "In January this year, we said that if the exchange rate remained unchanged or appreciated further, and if the evidence pointed to reduced pressures on resources and medium-term inflation, then there might be scope for a cut in the OCR later in the year. In our judgement, these conditions have now been met.

"The available data suggest that growth in the New Zealand economy is slowing as we projected in our March 2003 Monetary Policy Statement. A weak international economy is now being reflected in softer activity in New Zealand's tradable sector. The domestic economy remains relatively robust, especially in the housing market. However, the weaker tradable sector is expected to feed through into reduced domestic demand elsewhere in the economy, as exporters' incomes decline.

"With the passage of time, we are now more confident that inflationary pressures will ease, which is the basis of today's decision. …

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