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Interest rates forecast to stay lowThursday 10 September 2009 Reserve Bank Governor Alan Bollard held the official cash rate at 2.50% today, as expected, and reiterated his view that the rates will stay low until the end of next year. By Paul McBeth This is in contrast to the markets which have been suggesting rate rises early next year. In the statement he said: "As we have said previously, the forecast recovery in economic activity is based on monetary policy continuing to provide substantial support to the economy. We expect such support will be needed for some time. "As a result, we continue to expect to keep the OCR at or below the current level through until the latter part of 2010." Bollard said the kiwi dollar's strength is a threat to the recovery. The economy will climb out of recession in the third quarter, the Treasury said this week, ending a six-quarter contraction that's slashed company earnings, eroded government tax revenue and driven up unemployment.
Comments from our readersNo comments yet Add your comment:The residential property market remains constrained, although is being buoyed somewhat by fixed mortgage rate cuts, according to the ANZ's August Property Focus. Buyers cautious as activity remains subdued House prices extended their decline for a fifth month as a backlog of unsold property sits on the market. Review may give investors some depreciation relief Commercial and industrial property investors should still be able to claim significant depreciation allowances, an asset depreciation expert says. |
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