ibusinesslines.com
ibusinesslines.com July 16, 2018


New Zealand holds interest rate at record low

10 August 2017, 03:05 | Melissa Porter

New Zealand holds interest rate at record low

New Zealand holds interest rate at record low

New Zealand's central bank left its official cash rate (OCR) unchanged at 1.75 percent on Thursday.

According to RBNZ policy makers, global economic growth increased and became more broad-based but wage growth subdued due to surplus capacity.

RBNZ Assistant Governor John McDermott told Reuters this most subtle of changes was aimed at communicating the bank's growing discomfort to the market, while recognising that some would have been disappointed they didn't use stronger language.

Many of those factors were worldwide in nature, and Wheeler gave MPs a piece of advice in recognising that New Zealand's economy is hugely influenced by overseas events.

"It's fair to say the market should recognise our discomfort with what happened", he said referring to the currency's rise.

In the first quarter of this year, New Zealand's economy grew a below trend 0.5%, after an anemic 0.4% expansion in the fourth quarter blamed on temporary factors including an natural disaster.

Labour productivity shrank 0.1 percent in the 2017 March year after contracting 0.2 percent in 2016, although the central bank predicts it will hit 0.9 percent by 2020, the end of its forecast horizon, which would be the highest level since 2011.


But the changes to its forecasts were limited.

In a note before the release, Bank of New Zealand currency strategist Jason Wong said he expected Wheeler "to play with a straight bat in his final showing as governor" and that the "underlying message will be that the RBNZ is in no hurry to join some other major central banks in looking to remove policy accommodation".

"The trade-weighted exchange rate has increased since the May Statement, partly in response to a weaker USA dollar", RBNZ Governor Graeme Wheeler said in a statement.

At the May MPS, only one quarter-point rate hike was projected by 2020 and there has been speculation Thursday's forecasts will be just as flat.

New Zealand has seen some of the fastest growth among advanced economies in recent years, but recent data pointed to a loss of momentum.

The central bank also said a lower New Zealand dollar would be favourable.

"This moderation is expected to persist, although there remains a risk of resurgence in prices given continued strong population growth".



Other News

Trending Now

Gionee A1 Lite launched in India: Specs, features and pricing
Unlike the Plus variant, the Gionee A1 Lite has a single rear camera setup, under which there is a fingerprint scanner. The device will be available across brick and mortar stores in the country from August 10 onwards.

Whatsapp will soon allow its users to instantly transfer money via UPI
Facebook's Messenger already has a peer-to-peer payments and this was introduced in 2015, though this option is limited to the US. Next WhatsApp step, that should be available when all business services will be released for all users , will be payments.

Hey neighbors! Nearest sun-like star hosts 4 Earth-sized planets
In the search for potentially habitable Earth-like exoplanets, those found orbiting Sun-like stars are good candidates. Stars which are similar in size to our Sun are considered the best targets for finding habitable Earth-like planets .

New Tile Pro line brings better range, alerts, smart speaker integration
Finally, and perhaps as the most helpful feature, Tile is making its products compatible with Amazon Alexa and Google Assistant. You can use the Tile in reverse to find your phone by pressing the button to make your phone ring, even if it's on silent.

Ray of hope to lepers, Dr Ruth Pfau passes away in Karachi
She was awarded Hilal-i-Imtiaz, second highest civilian award of country in 1979, and later granted Pakistani citizenship in 1988. She studied medicine in Germany in the 1950s and joined the Daughters of the Heart of Mary before leaving for India via Karachi .

North Korea threatens the US, Stephen Colbert says we're all gonna die
Needless to say, it's been a rough week, but Stephen Colbert is doing everything he can to help us get through it without losing our minds.

Featured Stock Overview: The Coca-Cola Company (KO)
Several other hedge funds have also recently bought and sold shares of KO. 102 funds opened positions while 503 raised stakes. BidaskClub cut Coca-Cola Company (The) from a "buy" rating to a "hold" rating in a report on Saturday, July 1st.