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New Zealand's official interest rate unchanged at 7.25 percent

New Zealand's official interest rate unchanged at 7.25 percent

New Zealand's central bank left its benchmark interest rate unchanged at 7.25 percent Thursday, but warned of a possible hike if housing and domestic demand remain strong.
The bank has left the official cash rate unchanged since December 2005, but Reserve Bank Governor Alan Bollard said he could not rule out a rate hike in the near to midterm.
"In the absence of clear indications of a moderation in housing and domestic demand, it is likely that further policy tightening will be required," Bollard said.
"A return to a moderating trend in housing and domestic demand will be essential if we are to see a reduction in medium term inflation pressures."
New Zealand's inflation rate fell to 2.6 percent in December as a result of lower oil prices and a strengthening fourth quarter exchange rate.
The inflation outlook was benign in the near term but the medium term outlook was less rosy. Annual rates of inflation are projected to return to the upper part of the Reserve Bank's 1-3 percent target range through 2008 and into 2009, Bollard said.
The Reserve Bank of New Zealand will review interest rates again in March after completing a full review of economic forecasts.


Updated : 2021-04-19 02:15 GMT+08:00