New Zealand's Reserve Bank leaves official cash rate unchanged

New Zealand's Reserve Bank leaves official cash rate unchanged

The kiwi traded at US73.26 cents as at 8am on Thursday in Wellington from US73.16c late Wednesday.

RBNZ Governor Graeme Wheeler said on Thursday that monetary policy would remain accommodative for a while yet, sticking to the language of recent statements after keeping interest rates at a record-low 1.75 percent - as expected.

"Monetary policy is expected to remain stimulatory in the advanced economies, but less so going forward". Swaps data show about an 80 percent chance of an increase by next August.

It notes that the exchange rate increased since May monetary policy largely due to a weaker dollar.

All 21 economists in a Reuters poll expected the central bank to stay put on Thursday, but some had expected it to strike a more dovish tone by acknowledging the recent run of softer data or adjusting its inflation and interest rate forecasts.

Inflation accelerated to 2.2 percent in the March quarter, returning to its 2 percent goal for the first time in more than five years.

"The underlying message will be that the RBNZ is in no hurry to join some other major central banks in looking to remove policy accommodation".

30 kids die in 2 days from encephalitis
He added,"District Magistrate has ordered a magisterial inquiry into the incident , report will be out in 24 hrs". However, the hospital's Chief Medical Superintendent RS Shukla rejected the reports.

But he said headline inflation was likely to decline in coming quarters as the effects of higher fuel and food prices dissipate.

Despite this, the central bank sees inflation growth slowing this year by more than forecast in the May statement, although it expects inflation to reach 2.0 percent in the first quarter of 2020 - broadly in line with forecasts in the May statement. Policymakers noted that the "outlook for tradable inflation remains weak", while 'non-tradables inflation remains moderate but is expected to increase gradually as capacity pressure increases, bringing headline inflation to the midpoint of the target range over the medium term.

In the first quarter of this year, New Zealand's economy grew a below trend 0.5%, after an anemic 0.4% expansion in the fourth quarter blamed on temporary factors including an quake.

The RBNZ lowered its expectations for inflation through 2018 and 2019. The trade-weighted index was little changed at 77.26 from 77.19.

That's at least partly due to lending restrictions introduced by Wheeler, whose five-year term as governor ends September 26.

"This moderation is expected to persist, although there remains a risk of resurgence in prices given continued strong population growth".

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