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

 

Official Cash Rate cut to 4.75 per cent

Official Cash Rate cut to 4.75 per cent

The Reserve Bank today cut the Official Cash Rate by half a per cent from 5.25 per cent to 4.75 per cent.

Reserve Bank Governor Don Brash commented "A good deal has changed since our last assessment in August. Even before the tragic events of 11 September, the world economy was slowing quite rapidly. The events of 11 September exacerbated that slowdown by dealing a blow to business and consumer confidence around the world, and led us to cut interest rates by half a per cent on 19 September.

"The slowdown in the international economy is already affecting the New Zealand economy and will continue to do so. Export prices are now falling across a wide front, while nervousness about air travel is having an adverse impact on the growth of tourism. Business confidence has declined markedly, and we are expecting investment spending to slow. The economy has already slowed quite sharply and is likely to continue growing rather slowly in the immediate future. This will exert downwards pressure on inflation.

"New Zealand enters this period of slow international growth in a relatively strong position with demand pressures on productive resources still evident in some areas. However, the slowdown in growth expected over the coming year should see these pressures abate, with inflation expected to fall back to around the middle of the target band.

"Monetary policy is now set to accommodate quite a bit of additional weakening in the global environment. That reflects our judgement about the risks that lie ahead. But the uncertainty in the present situation is very considerable, and it is not inconceivable that the current slowdown will prove to be short-lived.

"We will be monitoring all of the information as it becomes available, and will be constantly vigilant as to the outlook for inflation," Dr Brash concluded.

The Reserve Bank is next scheduled to review the Official Cash Rate on 23 January 2002.

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Debt: NZ Banks Accelerate Lending In June Quarter

New Zealand's nine major lenders boosted lending at the fastest quarterly pace in almost two years as fears over bad debts subsided. More>>

ALSO:

Balance Of Trade: Annual Current Account Deficit Widens To $9.5 Billion

New Zealand’s current account deficit for the year ended June 2018 widened to $9.5 billion, 3.3 percent of GDP, Stats NZ said today. More>>

ALSO:

Talking Up The Economy: NZD Gains On PM's Mistaken GDP Comment

Her comments were downplayed by her chief press secretary who said she was referring the government's June year financial statements and had "made a mistake." More>>

ALSO:

Oxfam: Drug Companies Cheating Countries Out Of Billions In Tax

Oxfam’s analysis suggests these four companies are shifting profits out of countries where they do their business and into tax havens that charge little or no tax. More>>