New Zealand Should Keep Rate at 2.5%, Shadow Board Says
New Zealand central bank Governor Alan Bollard should keep the official cash rate at a record-low 2.5 percent this week, according to the shadow board set up by the New Zealand Institute of Economic Research Inc.
Seven of the board’s nine members said no change was the most appropriate decision while two prefer a rate cut, according to an e-mailed statement today. Bollard, a former director of the NZIER, announces his decision in Wellington on April 26.
Bollard has kept the cash rate at 2.5 percent since March last year as the economic recovery has been hampered by weak global demand while a rising currency curbs inflation. All 16 economists surveyed by Bloomberg News forecast no rate change this week, with just two expecting an increase before September.
The board comprising academics, economists and business executives is a pilot run by the Wellington-based institute to encourage debate on each rate decision. The participants indicate where they think rates should be not what they expect will happen, the institute said.
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