OCR Unchanged at 2.5 Percent
6 December 2012
The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.5 percent.
Reserve Bank Governor Graeme Wheeler said: "Economic growth has slowed in recent months and has been accompanied by low inflation and rising unemployment. However, over the next two years, growth is expected to accelerate to between 2.5 and 3 percent per annum.
"The global outlook remains soft but appears less threatening than was the case earlier in the year. The risk of severe near-term deterioration in the euro area has decreased and Chinese economic indicators have been more positive recently. However, uncertainty around the US fiscal position is constraining US growth.
"Repairs and construction in Canterbury continue to gather pace, and the housing market is strengthening, particularly in Auckland. Lower funding costs for New Zealand banks, along with increased competition for lending, have seen mortgage interest rates reduce.
"Dampening factors include the Government's fiscal consolidation and continued cautiousness by households and businesses in their spending decisions. …