RBNZ holds steady. Cash rate remains at 1.75%
The Reserve Bank will now issue formal projections of the future expected Official Cash Rate
The Reserve Bank uses monetary policy to maintain price stability as defined in the Policy Targets Agreement (PTA).
Economists seem to be in agreement that new macro-prudential measures to curb the housing market could be introduced in the near future, but with all options on the table they are unsure of what the measures might be.
After cutting the cash rate by 25 basis points last month, the RBNZ in late April decided to keep interest rates steady at 2.25%. Despite a stronger New Zealand Dollar and ongoing low inflation, there have been no clear signs that the New Zealand economy has deteriorated significantly since the RBNZ last met.
After reducing the official cash rate (OCR) four times during 2015, the RBNZ decided in March, to reduce the interest rates by a further 25 basis points. This decision takes the OCR to 2.25%, its lowest level since inception in March 1999.
What's the RBNZ thinking?
After cutting rates at its last two meetings the RBNZ decided to again reduce interest rates by another 0.25 basis points to 2.75%.