New Zealand’s central bank said Wednesday its interest rate freeze was likely to continue for another two years amid persistent low inflation and a healthy growth outlook.
The official cash rate (OCR) has been unchanged at 1.75 percent since November 2016 as the Reserve Bank of New Zealand takes a hands-off approach to maintaining economic growth.
‘We expect to keep the OCR at this level through 2019 and 2020. The direction of our next OCR move could be up or down,’ Governor Adrian Orr said Wednesday.
While the economy is expected to grow at about 3.0 percent this year, Orr said inflation remained at the lower end of the bank’s 1.0-3.0 target band.
‘Employment is near its maximum sustainable level. However, core consumer price inflation remains below our 2.0 percent target mid-point, necessitating continued supportive monetary policy,’ he said.
Orr added: ‘We will keep the OCR at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low and stable inflation.’