Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

OCR unchanged at 6.75 per cent

Reserve Bank of New Zealand

News Release
OCR unchanged at 6.75 per cent

The Reserve Bank has left the Official Cash Rate (OCR) at 6.75 per cent.

Reserve Bank Governor Alan Bollard said: "Since our June Monetary Policy Statement, economic indicators have broadly confirmed the slowdown in activity that commenced in the second half of 2004. The slowdown has been concentrated in sectors such as manufacturing and tourism that have been exposed to the high exchange rate. The non-traded sectors of the economy on the other hand, such as household and business services and construction, have maintained their high growth of recent years. The housing market in particular has remained strong, underpinning consumption growth. Reflecting the slow pullback in domestic demand, capacity and labour shortages are expected to persist well into 2006.

"New developments in oil prices have made the future more uncertain. Oil prices have surged in recent months and are now 20 per cent higher than projected in June, some 60 per cent up from the end of 2004. As a consequence, headline CPI inflation is now forecast to approach 4 per cent over the next few quarters before returning below 3 per cent by early 2007. Monetary policy will not attempt to offset the unavoidable first-round price effects of the oil price spike. However, it will be used to resist any flow-through to ongoing price and wage inflation. Further out, the higher oil prices are expected to have a dampening effect on both world and domestic economic activity, thus taking some pressure off monetary policy in the medium-term.

"Fiscal policy is also adding to uncertainty. The shape and economic impact of new post-election policies is not clear at this point. However, it does appear likely that fiscal policy will become more expansionary in the period ahead.

"Right now, it is too early to make a call on the relative strength of the emerging cross-currents and how these will translate into medium-term inflation pressures. It will be several months before the persistence and global impact of the oil shock become more apparent. A similar period could be needed for the fiscal outlook to be clarified. We are concerned, however, that the risk of higher medium-term inflation has increased. Consequently, further monetary policy tightening may still prove necessary to ensure inflation is kept within the 1 per cent to 3 per cent target band on average over the medium-term. Certainly there remains no prospect of a cut in the OCR in the foreseeable future."

You can view the Reserve Bank of New Zealand's Monetary Policy Statement at the following link:

http://www.rbnz.govt.nz/monpol/statements/index.html

ENDS

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines


Covid-19: Govt Purchases Enough Pfizer Vaccines For Whole Country

The Government has guaranteed that every New Zealander will have access to the Pfizer/BioNTech vaccine, after securing an additional 8.5 million doses, Prime Minister Jacinda Ardern announced today.

“The Government has signed an advance purchase agreement for 8.5 million additional doses, enough to vaccinate 4.25 million people... More>>


 


Earthquakes: Tsunami Activity – Cancelled

The National Advisory issued at 2:48pm following this morning's earthquakes near the KERMADEC ISLANDS REGION is cancelled.
The advice from GNS Science, based on ocean observations, is that the Beach and Marine threat has now passed for all areas... More>>

Joint Press Release: Dirty PR Exposed In Whale Oil Defamation Trial

Three public health advocates are relieved that their long-standing Whale Oil defamation trial against Cameron Slater, Carrick Graham, Katherine Rich and the Food and Grocery Council has finally concluded and they are pleased that the truth has come out... More>>

ALSO:


Government: Next Stage Of COVID-19 Support For Business And Workers

The Government has confirmed details of COVID-19 support for business and workers following the increased alert levels due to a resurgence of the virus over the weekend... More>>

ALSO:


Maori Party: New National Executive

This morning the Māori Party confirmed their new National Executive including Che Wilson, Fallyn Flavell, John Tamihere and Kaiarahi Takirua: Rawiri Waititi and Debbie Ngarewa-Packer... More>>

Government: Balanced Economic Approach Reflected In Crown Accounts

New Zealand’s economic recovery has again been reflected in the Government’s books, which are in better shape than expected.
The Crown accounts for the seven months to the end of January 2021 were better than forecast in the Half Year Economic and Fiscal Update (HYEFU)... More>>


Covid-19: Auckland Back To Alert Level Three After One New Community Case Revealed

Auckland will move to alert level three for a week at 6am tomorrow morning after two new Covid-19 community cases announced this evening could not be directly linked to earlier cases, the Prime Minister has confirmed.
The rest of the country will move to level two.... More>>

NZ Initiative: New Report Highlights How Our Housing Crisis Could Worsen If We Don’t Act Now

If New Zealand politicians thought the housing crisis in 2020 was bad, the worst is yet to come, warns a new report by The New Zealand Initiative. In The Need to Build: The demographic drivers of housing demand , Research Assistant Leonard Hong ... More>>

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels