In a more upbeat message about the economy than in recent months the Reserve Bank this morning again opted to keep the official cash rate where it is at 2.5%.No one expected Reserve Bank governor Alan Bollard to lift the OCR this morning, even though yest
In a more upbeat message about the economy than in recent months the Reserve Bank this morning again opted to keep the official cash rate where it is at 2.5%.
No one expected Reserve Bank governor Alan Bollard to lift the OCR this morning, even though yesterdays’ National Bank business confidence survey was more optimistic than anticipated.
Rather, the focus was on whether there would be any signal about when the rate, which is currently at stimulatory levels, would be raised. The previous choice of words from the central bank has been rises would begin “around the middle of the year.”
Today, the choice of words changed but the meaning didn’t alter much.
“As previously indicated, we expect to begin removing policy stimulus over the coming months, provided the economy continues to evolve as projected,” Dr Bollard said.
Growth is running slightly higher than the Reserve Bank expected in its March monetary policy statement.
Crucially, Dr Bollard remains relatively dovish on inflation: it is expected to track within the 1-3% band over the medium term.
