New Zealand Reserve Bank Governor Adrian Orr said markets had finally gotten the message that interest rates would remain low for some time, adding that the decline of the New Zealand dollar was a good thing for the economy.
The Reserve Bank of New Zealand kept interest rates unchanged at 1.75% at its last meeting as expected. The change in the tone of the monetary policy statement prompted the New Zealand dollar to fall to a five-month low of 0.6900 levels.
The bank trimmed its inflation forecast slightly to reach the midpoint of the target range of 2% at the last quarter of 2020. Orr sees the decline of the New Zealand dollar was good for a country dependent on trade.
Orr assessed the local economy as generally optimistic and supported spending increases in Prime Minister Jacinda Ardern's first budget for the Labor-led government.
