RBNZ leaves OCR unchanged amid bearish bias

The Reserve Bank of New Zealand (RBNZ) matched broad consensus by leaving the official cash rate (OCR) unchanged at 1.75%. The New Zealand central bank expects to keep the OCR at this level through 2019 and 2020 with no strong signals on its next moves.

Employment is near its maximum sustainable level.
Trading-partner growth is expected to further moderate in 2019 and global commodity prices have already softened, reducing the tailwind that New Zealand economic activity has benefited from.
The risk of a sharper downturn in trading-partner growth has also heightened over recent months.
Despite the weaker global impetus, we expect low interest rates and government spending to support a pick-up in New Zealand’s GDP growth over 2019.
Keep the OCR at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low and stable inflation.

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