New Zealand Central Bank Holds Key Rate As Widely Expected
10 April 2024 - 5:37AM
RTTF2
New Zealand's central bank left its benchmark rate unchanged for
the sixth straight session as widely expected on Wednesday, as
higher rates help to bring inflation to the target range.
The Monetary Policy Committee of the Reserve Bank of New
Zealand, led by Governor Adrian Orr, decided to hold the Official
Cash Rate at 5.50 percent.
The RBNZ had raised its policy rate sharply from 0.25 percent in
October 2021.
Policymakers observed that the ongoing restrictive policy
settings are required to reduce inflation, while avoiding
unnecessary instability in output, employment, interest rates and
the exchange rate.
New Zealand's economic growth remained weak. While some
near-term price pressures remain, policymakers are confident that
maintaining the current policy rate was necessary.
The MPC reiterated that interest rates need to remain at a
restrictive level for a sustained period to ensure annual consumer
price inflation returns to the 1 to 3 percent target range.
Members discussed both upside and downside risks to inflation.
They said the balance of risks was little changed since the
February Statement.
Although policymakers did not drop any hints as to when it might
pivot to looser policy today, they are likely to start cutting
rates by August, Capital Economics' economist Abhijit Surya
said.
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