New Zealand leaves interest rate at 8.25%. - Forex & Currency Trading Blog

March 5, 2008 - Forex Economic News

New Zealand leaves interest rate at 8.25%.

The New Zealand Reserve Bank left its official cash rate unchanged at 8.25 percent today according to a government news release. The Bank stated that inflation risks still remain high to the New Zealand economy and may still increase in the near future. The inflationary pressures, which are rising above the Banks target range, will keep the rate at 8.25 percent for the foreseeable future according to the Reserve Bank's Governor Alan Bollard. "Given this outlook, we expect that the OCR will need to remain at current levels for a significant time yet to ensure inflation outcomes of 1 to 3 percent on average over the medium term."

The Bank also noted that the economic growth outlook has been revised downward to 2 percent GDP growth expected for the next 3 years. A slowing housing market, a global economic slowdown and harder to get credit conditions were highlighted in the report for a weaker economic outlook. The New Zealand dollar reacted positively to the interest rate news as it strengthened against most major currencies.

Tags: new zealand reserve bank, rbnz, interest rate, official cash rate, Alan Bollard

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