RBNZ Keeps Key Rate at 2.25% as Inflation, Housing Pick Up
- Governor Wheeler says further easing may still be needed
- New Zealand dollar jumps to 12-month high of 71 U.S. cents
Why Is the RBNZ Keeping Its Powder Dry?
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New Zealand’s central bank left the benchmark interest rate unchanged for a second straight meeting, saying it expects inflation to accelerate and is worried about a resurgence in house prices. The currency surged to a 12-month high.
“House-price inflation in Auckland and other regions is adding to financial stability concerns,” Reserve Bank Governor Graeme Wheeler said in a statement Thursday in Wellington, after holding the official cash rate at 2.25 percent. However, “further policy easing may be required to ensure that future average inflation settles near the middle of the target range,” he said.