The Reserve Bank of New Zealand held interest rates unchanged at 1.75% in November meeting. The main points of the rate statement were as follows:
- Interest rates are expected to remain at these levels during 2019 and 2020.
- There are upside and downside risks facing growth and inflation expectations.
- The decision depends on the economic data.
- GDP recovery during the second quarter is due to temporary factors.
- Employment rates are near sustainable levels.
- Core inflation remains below 2%.
- GDP is likely to recover in 2019.
- Expansionary policies support the growth of household spending and business investment.
- Current levels of NZD support export growth.
- Core consumer prices are expected to stabilize near the target at 2%.
- There are still downside risks to growth forecast.
- lower business confidence may affect growth for a longer period
- Trade tensions persist in some major economies, increasing the risk of increasing trade barriers and undermining global growth.
- High fuel prices increase inflation in the short term
- Long-term inflation expectations remain firmly on our target.
We will keep interest rates and expansionary monetary policy as long as possible to support the sustainability of employment and maintain inflation stability
