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11 Mar 2015
RBNZ leaves rate unchanged at 3.5%
FXStreet (Córdoba) - At today’s meeting, the Reserve Bank of New Zealand decided to keep Official Cash Rate unchanged at 3.5% for fifth month in a row.
The RBNZ said in a statement that future interest rate adjustments, either up or down, “will depend on the emerging flow of economic data”.
In the meantime, the RBNZ considers the domestic economy remains strong and notes the drop in oil prices has increased households’ purchasing power and lowered the cost of doing business.
Although the fall in oil prices is net positive for global economic growth, the RBNZ notes it will further reduce inflation in the near term.
The central bank also said the New Zealand dollar remains “unjustifiably high and unsustainable” in terms of New Zealand’s long-term economic fundamentals. “A substantial downward correction in the real exchange rate is needed to put New Zealand’s external accounts on a more sustainable footing”.
The New Zealand dollar reacted positively to the statement, moving off a 1-month low of 0.7184 to a session high of 0.7248 against the greenback. However, the effect is likely to be short-lived as the decision was widely expected.
The RBNZ said in a statement that future interest rate adjustments, either up or down, “will depend on the emerging flow of economic data”.
In the meantime, the RBNZ considers the domestic economy remains strong and notes the drop in oil prices has increased households’ purchasing power and lowered the cost of doing business.
Although the fall in oil prices is net positive for global economic growth, the RBNZ notes it will further reduce inflation in the near term.
The central bank also said the New Zealand dollar remains “unjustifiably high and unsustainable” in terms of New Zealand’s long-term economic fundamentals. “A substantial downward correction in the real exchange rate is needed to put New Zealand’s external accounts on a more sustainable footing”.
The New Zealand dollar reacted positively to the statement, moving off a 1-month low of 0.7184 to a session high of 0.7248 against the greenback. However, the effect is likely to be short-lived as the decision was widely expected.