Academic journal article The Reserve Bank of New Zealand Bulletin

OCR Unchanged at 2.5 Percent: 30 January 2014

Academic journal article The Reserve Bank of New Zealand Bulletin

OCR Unchanged at 2.5 Percent: 30 January 2014

Article excerpt

Statement issued by Reserve Bank Governor Graeme Wheeler:

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

New Zealand's economic expansion has considerable momentum. Prices for New Zealand's export commodities remain very high, especially for dairy products. Consumer and business confidence are strong and the rapid rise in net inward migration over the past year has added to consumption and housing demand. Construction activity is being lifted by the Canterbury rebuild and by work in Auckland to address the housing shortage. Continued fiscal consolidation will partly offset the strength in demand. GDP grew by 3.5 percent in the year to September, and growth is expected to continue around this rate over the coming year.

While agricultural export prices are expected to come off their peak levels, overall export demand should benefit from improving growth in the global economy. However, improvements in the major economies have required exceptional monetary accommodation and there remains uncertainty about the timing of withdrawal of this stimulus and its effects, especially on emerging market economies. …

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