No change for official cash rate

The Reserve Bank of New Zealand has kept the official cash rate (OCR) on hold at 5.5 per cent as its monetary policy committee says the domestic economy continues to evolve as anticipated.

Current consumer price inflation remains above the committee’s target range of one to three per cent and the Reserve Bank says a “restrictive monetary policy stance remains necessary to further reduce capacity pressures and inflation”. 

“Economic growth in New Zealand remains weak,” it adds. “While some near-term price pressures remain, the committee is confident that maintaining the OCR at a restrictive level for a sustained period will return consumer price inflation to within the target range this calendar year.

“Ongoing restrictive monetary policy settings are necessary to reduce inflation, while avoiding unnecessary instability in output, employment, interest rates and the exchange rate.”

The committee’s OCR decision was announced on April 10 following its latest meeting where developments in the New Zealand and global economies were discussed. 

It notes economic growth in most of New Zealand’s major trading partners has been below trend and is expected to slow further during 2024.