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
Don’t count on a market upturn
It’s been a spectacular run for the market but this property cycle has done its dash and recent positive developments aren’t likely to cause a major upturn, one top economist says.
House Prices
Wellington City price glow spreads
Remember Auckland’s “halo effect”? Well, it’s happening again but this time it’s at play in the Wellington region as the capital’s market powers along.
Commercial
Changing world, changing property market
Technology and changes to the way people work are set to transform the commercial property sector and investors need to be attuned to these developments.
Mortgages
Investor lending weak in March
The latest Reserve Bank lending data reveals investors borrowed more than $1 billion in March, the highest figure since November, but a 10% fall on the same period last year.
