New Zealand to cut interest rates when needed
The central bank of New Zealand said that it is willing to cut interest rates if needed amid slow-paced economic growth and subdued inflation. This had kept the official cash rate on hold on Wednesday.
The Monetary Policy Committee agreed with what the Reserve Bank said that the new information since the decision in August did not warrant a significant change to the monetary policy outlook.
However, it said that there remains scope for more fiscal and monetary stimulus if necessary, to support the economy and maintain the inflation and employment objectives.
The RNBZ has reduced the interest rate by 75 basis points this year plus a 50-point trim in August.
“Even though the OCR remained steady at this meeting, a lower OCR remains very much on the cards. But by itself the statement suggests that a November cut isn’t a dead certainty, even though we think it is the highly outcome,” chief economist at ASB Bank in Auckland said.
The statement propelled the kiwi dollar, posting 63.45 U.S. cents.
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