RBNZ cuts rates to 2.50% from 2.75%

By FXStreet FXStreet (Córdoba) – The Reserve Bank of New Zealand (RBNZ) decided to cut the Official Cash Rate (OCR) for fourth time this year, to 2.50% from 2.75%.

The RBNZ however, expects rates to remain steady at low levels, although the bank is prepared to cut further if needed.

“Monetary policy needs to be accommodative to help ensure that future average inflation settles near the middle of the target range”, said the RBNZ in a statement. “We expect to achieve this at current interest rate settings, although the Bank will reduce rates if circumstances warrant. We will continue to watch closely the emerging flow of economic data”.

The RBNZ also said that the New Zealand dollar rise is “unhelpful and further depreciation would be appropriate in order to support sustainable growth”.

Regarding inflation, the RBNZ noted the CPI inflation is below the 1-3% target range, mainly due to the earlier strength in the NZD and the 65% fall in world oil prices since mid-2014. “The inflation rate is expected to move inside the target range from early 2016, as earlier petrol price declines will drop out of the annual calculation, and the lower New Zealand dollar will be reflected in higher tradables prices”.
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Source:: FX Street