New Zealand’s central bank left interest rates at a record low of 2.5 percent on Thursday, saying it expected improved economic growth and modest inflation in the coming year.
The Reserve Bank of New Zealand said global growth was set to recover in 2013 and the domestic economy appeared to have shrugged off “softness” seen in the middle of last year.
Central bank governor Graeme Wheeler said inflation was at the lower end of its 1.0-3.0 target range and expected to rise slightly during the year as activity in the construction sector picks up.
“Overall, we expect economic growth to strengthen over the coming year, reducing spare capacity and bringing inflation slowly back towards the two percent target midpoint,” he said in a statement.
“On balance, it remains appropriate for the OCR (official cash rate) to be held at 2.5 percent.”
The benchmark rate in New Zealand has been unchanged since March 2011, when the bank set it at an all-time low to help cushion the economy from the impact of the Christchurch earthquake a month earlier.
New Zealand's central bank holds rates at record low
