IANS | 10 Jul, 2024
New Zealand Reserve Bank's Monetary Policy Committee agreed to maintain
the Official Cash Rate (OCR) at 5.5 per cent on Wednesday.
The Monetary Policy Committee expected New Zealand's headline inflation
to return to within the 1 to 3 per cent target range in the second half of this
year, reports Xinhua news agency.
The restrictive monetary policy has significantly reduced consumer price
inflation, the committee said in a statement.
The committee agreed that monetary policy will need to remain
restrictive, the extent of which will be tempered over time consistent with the
expected decline in inflation pressures.
The OCR influences the price of borrowing money in New Zealand, and the
level of economic activity and inflation, it said.
The decline in inflation reflects receding domestic pricing pressures,
as well as lower inflation for goods and services imported into New Zealand,
the statement said.
Labour market pressures have eased, reflecting cautious hiring decisions
by firms and an increased supply of labour. The level of economic activity,
including business and consumer investment spending and investment intentions,
is consistent with the restrictive monetary stance, it said.
Current and expected government spending will restrain overall spending
in the economy. However, the positive impact of the pending tax cuts on private
spending is less certain, it said.