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Steady as she goes from the RBNZ

Written by Sam Coxhead on January 27th, 2011.      0 comments

9:10 AM (NZT) The RBNZ left rates unchanged as completely expected. The statement was very measured as one would expect from Dr Bollard. The NZD has just popped higher a touch in what looks to be speculative accounts short covering. Steady as see goes from the RBNZ. Below is the press release.

OCR unchanged at 3.0 percent  

Date 27 January 2011
  The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 3.0 percent.
Reserve Bank Governor Alan Bollard said: “The outlook for the New Zealand economy remains consistent with the projections underlying the December Monetary Policy Statement.
“Domestic economic activity was weaker than forecast through the second half of 2010. September quarter GDP declined unexpectedly, and retail spending appears to have fallen in the December quarter.
“Forward indicators of activity have firmed somewhat. Trading partner activity continues to expand and New Zealand’s export commodity prices have increased further. Within New Zealand, business confidence, across a range of industries, has picked up and imports of capital equipment have grown. Furthermore, there are tentative signs that housing market activity has stabilised, after having trended lower for some months.
“The recent increase in the rate of GST has caused headline CPI inflation to spike higher as expected, but underlying inflation remains comfortably inside the target band.
“As noted previously, while interest rates are likely to increase modestly over the next two years, for now it seems prudent to keep the OCR low until the recovery becomes more robust and underlying inflationary pressures show more obvious signs of increasing.”
          Last 24 hours trade
  Current level Pre-RBNZ Chge RBNZ   Low High
NZD/USD 0.7669 0.7655 0.2%   0.7648 0.7701
AUD/USD 0.9961 0.9954 0.1%   0.9930 0.9998
NZD/AUD 0.7703 0.7695 0.1%   0.7688 0.7718
AUD/NZD 1.2981 1.2995 -0.1%   1.2956 1.3007
NZD/GBP 0.4829 0.4822 0.1%   0.4820 0.4869
NZD/EUR 0.5605 0.5595 0.2%   0.5595 0.5625
NZD/JPY 63.23 63.15 0.1%   62.94 63.32
NZD/CAD 0.7638 0.7622 0.2%   0.7622 0.7668