Investing.com – The Reserve Bank of New Zealand kept its benchmark interest rate unchanged for the fourth straight meeting in September, it announced on Thursday.
In a statement, the RBNZ said it was keeping its benchmark interest rate unchanged at 2.50%, broadly in line with expectations.
Commenting on the decision, RBNZ Governor Alan Bollard said, “The New Zealand economy has performed relatively well, while headline inflation has increased somewhat since the June Statement. At the same time, however, global economic and financial risks have increased.”
Mr. Bollard continued, “Domestic economic activity has surprised on the upside, however the outlook for New Zealand’s trading partners has deteriorated markedly. There is now a real risk that global economic activity slows sharply.”
“If recent global developments have only a mild impact on the New Zealand economy, it is likely that the OCR will need to increase. For now, given the recent intensification in global economic and financial risks, it is prudent to continue to hold the OCR at 2.5%,” he added.
Following the decision, New Zealand's dollar was down sharply against its U.S. counterpart, with NZD/USD tumbling 1.16% to trade at 0.8138.
In a statement, the RBNZ said it was keeping its benchmark interest rate unchanged at 2.50%, broadly in line with expectations.
Commenting on the decision, RBNZ Governor Alan Bollard said, “The New Zealand economy has performed relatively well, while headline inflation has increased somewhat since the June Statement. At the same time, however, global economic and financial risks have increased.”
Mr. Bollard continued, “Domestic economic activity has surprised on the upside, however the outlook for New Zealand’s trading partners has deteriorated markedly. There is now a real risk that global economic activity slows sharply.”
“If recent global developments have only a mild impact on the New Zealand economy, it is likely that the OCR will need to increase. For now, given the recent intensification in global economic and financial risks, it is prudent to continue to hold the OCR at 2.5%,” he added.
Following the decision, New Zealand's dollar was down sharply against its U.S. counterpart, with NZD/USD tumbling 1.16% to trade at 0.8138.