Reserve Bank of New Zealand cash rate dropped to 4.75% from 5.25%,
The 50bp cut was widely expected.
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Statement summary points:
New Zealand is now in a position of excess capacity.Low import prices have assisted disinflation.The committee assesses annual consumer price inflation within its 1-3% target.It is appropriate to cut the OCR by 50 bps to achieve and maintain low and stable inflation.Business investment and consumer spending have been weak, and employment conditions continue to soften.Geopolitical tensions remain a significant headwind for world economic activity.New Zealand’s economy is now in a position of excess capacity, encouraging price- and wage-setting to adjust to a low-inflation economy.
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This article was written by Eamonn Sheridan at www.forexlive.com.
