Reserve Bank of New Zealand leave cash rate unchanged at 5.5%, as widely expected

<p>RBNZ Monetary Policy Review and official cash rate announcement. OCR remains at 5.5% as basically unanimously expected. </p><p>In brief from the Bank's statement:</p><ul><li>The level of interest rates are constraining spending and inflation pressure as anticipated and required. </li><li>The Committee agreed that the OCR will need to remain at a restrictive level for the foreseeable future, to ensure that consumer price inflation returns to the 1 to 3% annual target range, while supporting maximum sustainable employment.
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Global economic growth remains weak and inflation pressures are easing. </li><li>Global inflation rates continue to decline, assisted by the normalisation of international supply chains, and the decline in shipping costs and energy prices. </li><li>The weaker global growth has led to lower export prices for New Zealand's goods.</li><li>

In New Zealand, inflation is expected to continue to decline from its peak, and with it measures of inflation expectations. Core inflation is expected to decline as capacity constraints ease. </li><li>While employment is above its maximum sustainable level, there are signs of labour market pressures dissipating and vacancies declining.
</li><li> The Committee is confident that with interest rates remaining at a restrictive level for some time, consumer price inflation will return to within its target range of 1 to 3% per annum, while supporting maximum sustainable employment.</li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.