Today’s OCR statement
Thursday 27 September 2018
The Official Cash Rate will stay at 1.75 percent for now, the Reserve Bank has confirmed. Governor Adrian Orr continued to state the next move could be "up or down".
Here's what the governor said:
We expect to keep the OCR at this level through 2019 and into 2020. The direction of our next OCR move could be up or down.
Employment is around its sustainable level and consumer price inflation remains below the 2 percent mid-point of our target, necessitating continued supportive monetary policy. Our outlook for the OCR assumes the pace of growth will pick up over the coming year, assisting inflation to return to the target mid-point.
Our projection for the New Zealand economy, as detailed in the August Monetary Policy Statement, is little changed. While GDP growth in the June quarter was stronger than we had anticipated, downside risks to the growth outlook remain.
Robust global economic growth and a lower New Zealand dollar exchange rate is expected to support demand for our exports. Global inflationary pressure is expected to rise, but remain modest. Trade tensions remain in some major economies, increasing the risk that ongoing increases in trade barriers could undermine global growth. Domestically, ongoing spending and investment, by both households and government, is expected to support growth.
There are welcome early signs of core inflation rising towards the mid-point of the target. Higher fuel prices are likely to boost inflation in the near term, but we will look through this volatility as appropriate. Consumer price inflation is expected to gradually rise to our 2 percent annual target as capacity pressures bite.
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.
Comments from our readers
No comments yet
Sign In / Register to add your comment
Property News
Investors hold properties for longer
Public perception has it that investors spend their time flipping properties on a regular basis but new analysis shows they hold properties for longer than other buyers.
House Prices
NZ market out of step with Australia’s slump
New Zealand’s housing market might be cooling but it’s in sync with global trends – unlike the Australian market’s dramatic decline, according to a major bank.
Commercial
Niche options
Investors interested in a property that’s a bit different, but provides good returns, should check out one of the niche sectors on offer in the commercial sphere.
Mortgages
Investor slump continues in February
The latest Reserve Bank figures show investors borrowed just $886 million in February, down on the same month in 2017 and 2018, as first home buyers narrow the gap.
