March 8 (Bloomberg) -- New Zealand’s central bank left interest rates at a record low as weak economic growth, a rising currency and delays in rebuilding the earthquake-damaged city of Christchurch reduce inflation pressures.
The official cash rate stayed 2.5 percent, Reserve Bank Governor Alan Bollard said in a statement in Wellington today. The decision was forecast by all 16 economists in a Bloomberg News survey.
Bollard has held the cash rate since March last year to allow the economy to recover after the nation’s deadliest earthquake in 80 years rocked its second-largest city, killing 185 people and closing the central city. The recovery has been slow amid concern that Europe’s debt crisis would spill over into weak global demand for exports, which make up 30 percent of New Zealand’s economy.
“The inflation picture looks much friendlier than it did a few months ago and an unexpected surge in the exchange rate has further mitigated the need for policy tightening any time soon,” Dominick Stephens, Auckland-based chief New Zealand economist at Westpac Banking Corp. said before the statement. He expects a rate rise in December.
New Zealand’s dollar, the best-performing Group of 10 currency in the past year, fell after Bollard’s comments. It bought 81.81 U.S. cents at 9:01 a.m. in Wellington from 81.95 cents immediately before the statement.
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