29 Jan 2014
RBNZ maintains interest rate at 2.5%; to hike rates 'soon'
FXstreet.com (San Francisco) - 'The Reserve Bank today left the Official Cash Rate unchanged at 2.5 percent,' says the press release published on Wednesday by the bank. The RBNZ also commented that they would start to raise rates to more-normal levels 'soon', fueling NZD across the market.
The central bank considers that the New Zealand economy has considerable momentum as well as consumer and business confidences are strong. The RBNZ expects GDP to grow by 3.5% in the coming year.
From the press release:
New Zealand’s economic expansion has considerable momentum. Prices for New Zealand’s export commodities remain very high, especially for dairy products. Consumer and business confidence are strong and the rapid rise in net inward migration over the past year has added to consumption and housing demand. Construction activity is being lifted by the Canterbury rebuild and by work in Auckland to address the housing shortage. Continued fiscal consolidation will partly offset the strength in demand. GDP grew by 3.5 percent in the year to September, and growth is expected to continue around this rate over the coming year.
While headline inflation has been moderate, inflationary pressures are expected to increase over the next two years. In this environment, there is a need to return interest rates to more-normal levels. The Bank expects to start this adjustment soon.
The central bank considers that the New Zealand economy has considerable momentum as well as consumer and business confidences are strong. The RBNZ expects GDP to grow by 3.5% in the coming year.
From the press release:
New Zealand’s economic expansion has considerable momentum. Prices for New Zealand’s export commodities remain very high, especially for dairy products. Consumer and business confidence are strong and the rapid rise in net inward migration over the past year has added to consumption and housing demand. Construction activity is being lifted by the Canterbury rebuild and by work in Auckland to address the housing shortage. Continued fiscal consolidation will partly offset the strength in demand. GDP grew by 3.5 percent in the year to September, and growth is expected to continue around this rate over the coming year.
While headline inflation has been moderate, inflationary pressures are expected to increase over the next two years. In this environment, there is a need to return interest rates to more-normal levels. The Bank expects to start this adjustment soon.