Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


OCR rises to 5.25 per cent

The Reserve Bank today increased the Official Cash Rate (OCR) to 5.25 per cent.

This increase came with the Reserve Bank’s scheduled January OCR review.

Reserve Bank Governor Don Brash said today: "Both the domestic and world economies are growing strongly, and at least as strongly as foreshadowed in our last Monetary Policy Statement (MPS).

"The September quarter GDP number, released in December, confirmed our view that the economy is growing strongly, and that the recovery has been underway since the middle of 1998. Business and consumer confidence remain high, and international share markets are buoyant. Strong growth in the world economy is prompting interest rate rises around the world.

"The November MPS projected an ongoing series of interest rate increases, and today’s announcement should be seen in that context.

"Strong growth is gradually using up spare capacity in the economy. As this happens, to avoid inflation pressures building, the Reserve Bank needs to ease back on the degree to which monetary policy is stimulating the economy. An OCR of 5.25 per cent is still stimulatory, as opposed to being a brake on the economy, but less so than previously.

"By gradually, but promptly, adjusting the OCR in this fashion, the Reserve Bank is attempting to ensure that price stability is delivered in the context of economic growth that continues steadily for as long as possible," Dr Brash concluded.

Dr Brash noted that the OCR decision had been made without knowledge of the December quarter CPI, to be released later this morning. He stressed that knowledge of that number would not, by itself, materially alter the Bank’s policy assessment, which focuses on inflation prospects one to two years ahead.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Dump Levy Options: Waste Work Programme Announced

Associate Environment Minister Eugenie Sage has announced a programme of work to take action on New Zealand’s long-neglected waste problems. More>>


Real Estate: Foreign Buyers Ban Passes Third Reading

The Bill to put in place the Government’s policy of banning overseas buyers of existing homes has passed its third and final reading in the House. More>>


Nine Merger: Fairfax Slashes Value Of NZ Business

Fairfax Media Group more than halved the value of its Kiwi assets, attaching just A$40 million to mastheads that were once the core of a billion dollar investment. More>>

Collecting Scalpers: Commerce Commission To Sue Viagogo

The Commission will claim that Viagogo made false or misleading representations: • that it was an “official” seller, when it was not • that tickets were limited or about to sell out • that consumers were “guaranteed” to receive valid tickets for their event • about the price of tickets... More>>


Price Of Cheese: Fonterra CEO Goes Early After Milk Price Trimmed

Aug. 15 (BusinessDesk) - Fonterra Cooperative Group chief executive Theo Spierings is leaving the role early after the world's biggest dairy exporter lowered its farmgate payout and trimmed its dividend to retain cash. More>>