The Reserve Bank has left the OCR unchanged at 5.00 per cent, this being consistent with inflation outcomes within the Bank's target range.
As noted in our September Monetary Policy Statement, the New Zealand economy has been enjoying strong economic growth, with robust domestic demand countering weaker conditions in parts of the export sector. Strong inflation pressures are evident in some industries, although these pressures have to date been largely offset by weaker imported inflation.
saying that, the Bank reiterates that its headroom to absorb
additional inflation pressures over the medium term is
limited. The current market expectations of interest rates
appear broadly consistent with this view as currently
reflected in financial market prices. The Bank will continue
to assess activity and inflation pressures accordingly, as
new information comes to hand.