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New Zealand Holds Rate at Record Low of 1 Pct

The Reserve Bank of New Zealand kept its Official Cash Rate (OCR) at a record low of 1.0 percent on Wednesday.

The Monetary Policy Committee agreed that new information since the August Monetary Policy Statement did not warrant a significant change to the monetary policy outlook.

The Reserve Bank of New Zealand cut official cash rate by 50 basis points to a record low of 1 percent on Aug. 7. The 1-percent official cash rate is now the lowest since it was introduced in 1999.

In a statement on Wednesday, the reserve bank said, "The employment is around its maximum sustainable level, and inflation remains within our target range but below the 2 percent mid-point."

"Global trade and other political tensions remain elevated and continue to subdue the global growth outlook, dampening demand for New Zealand's goods and services. Business confidence remains low in New Zealand, partly reflecting policy uncertainty and low profitability in some sectors, and is impacting investment decisions," the statement said.

The reserve bank noted that keeping the OCR at low levels is needed to ensure inflation increases to the mid-point of the target range, and employment remains around its maximum sustainable level. "There remains scope for more fiscal and monetary stimulus, if necessary, to support the economy and maintain our inflation and employment objectives," the statement said.

The country's statistics department Stats NZ last Thursday said New Zealand's gross domestic product (GDP) lifted by 0.5 percent over the June quarter, for a 2.1 percent gain over the same quarter of last year, the lowest since 2013, in line with a general slowdown in economic activity.

(www.chinaview.cn 2019-09-30)