RBNZ leaves its cash rate target unchanged at 5.50%, as expected

<p>Reserve Bank of New Zealand</p><ul><li>
Demand growth in the economy continues to ease.</li><li>Committee agreed
that the OCR needs to stay at a restrictive level</li><li>Interest rates are
constraining economic activity and reducing inflationary pressure
as required</li><li>While GDP growth in
the June quarter was stronger than anticipated, the growth outlook
remains subdued.</li><li>With monetary
conditions remaining restrictive, spending growth is expected to
decline further</li><li>Near-term risk that
activity and inflation do not slow as much as needed</li><li>Prolonged period of
subdued activity is required to reduce inflationary pressure</li></ul><p>
RBNZ minutes:
</p><ul><li>Committee agreed
that interest rates may need to remain at a restrictive level for a
more sustained period of time</li><li>Committee noted
inflation is still expected to decline to within the target band by
the second half of 2024</li><li>Committee noted
inflation is still expected to decline to within the target band by
the second half of 2024</li><li>Recent indicators
show that employment intentions are flat and difficulty in finding
labour has reduced</li><li>Over the medium term
committee agreed downside risks around the outlook for global growth
remain</li></ul><p>—</p><p>Background to this decision:</p><ul><li><a href="https://www.forexlive.com/centralbank/rbnz-policy-decision-due-today-surprise-tightening-to-575-is-a-risk-but-a-small-one-20231003/" target="_blank" rel="follow" data-article-link="true">RBNZ policy decision due today – surprise tightening to 5.75% is a risk (but a small one)</a></li><li><a href="https://www.forexlive.com/centralbank/previewing-the-rbnz-policy-decision-due-today-rate-hike-ahead-of-election-is-unlikely-20231003/" target="_blank" rel="follow" data-article-link="true">Previewing the RBNZ policy decision due today – rate hike ahead of election is unlikely</a></li></ul>

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