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NZIER Shadow Board considers an OCR of 1.75% as still appropriate

Fuseworks Media
Fuseworks Media

NZIER’s Monetary Policy Shadow Board recommends the Reserve Bank leaves the Official Cash Rate on hold this Thursday at 1.75 percent. The Shadow Board continues to see a tightening bias as appropriate.

"The New Zealand growth outlook remains solid, with signs underlying inflation pressures are lifting. This suggests little need for further interest rate cuts. But there is no need to rush into rate increases. Downside risks from global developments suggest the Reserve Bank should adopt a wait and see approach, with any tightening likely to be some time away" said Christina Leung, Senior Economist at NZIER.

"The Shadow Board recommends the Reserve Bank continues to leave the OCR at 1.75 percent this Thursday. Inflation is picking up from a low base and with capacity pressures expected to broaden beyond the construction sector, we expect the Reserve Bank to keep the OCR on hold until mid-2018 before embarking on a measured tightening cycle."

The Shadow Board’s average recommended interest rate remained steady at 1.79 percent.

Read the full release attached.

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