OCR remains held at 2.5%

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.5%, in a short statement Dr Bollard confirmed "For now it is appropriate for the OCR to remain at 2.5%".

"The domestic economy is showing signs of recovery...
"Housing market activity continues to increase...
"A recovery in building activity appears to be underway - as forecast...
"That recovery will strengthen as repairs and reconstruction in Canterbury pick up later in the year."

The main concern for the Reserve Bank appears to be offshore "the global outlook remains of concern. Near-term indicators have moderated and financial market sentiment is still fragile."

"The New Zealand dollar has stayed elevated despite recent falls in commodity prices. Should the exchange rate remain strong without anything else changing, the Bank would need to reassess the outlook for monetary policy settings."

But what we don't know is what that reassessment may involve - as previously indicated a longer period of no change to the OCR; or whether they would see a cut to the rate.

The next Monetary Policy and OCR rate annoucement is 14th June.

If you are interested in reading past announements and statements from the Reserve Bank click here

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