Academic journal article The Reserve Bank of New Zealand Bulletin

OCR Unchanged at 2.5 Percent

Academic journal article The Reserve Bank of New Zealand Bulletin

OCR Unchanged at 2.5 Percent

Article excerpt

12 September 2013

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.5 percent.

Reserve Bank Governor Graeme Wheeler said: "The global outlook remains mixed. GDP growth in Australia and China has slowed and some emerging market currencies have come under considerable downward pressure. At the same time, the major developed economies continue to recover and New Zealand's export commodity prices remain very high.

"Although long-term interest rates have risen globally in recent months, largely due to uncertainty around the timing of the Federal Reserve's exit from quantitative easing, global financial conditions overall continue to be very accommodating.

"In New Zealand, GDP is estimated to have increased by 3 percent in the year to the September quarter. Consumption is rising and reconstruction in Canterbury will be reinforced by a broader national recovery in construction activity, particularly in Auckland. This will support aggregate activity and start to ease the housing shortage.

"In the meantime rapid house price inflation persists in Auckland and Canterbury. As has been noted for some time, the Reserve Bank does not want to see financial or price stability compromised by continued high house price inflation. …

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