Central Bank Holds Rates

At its September board meeting, the Reserve Bank of New Zealand (RBNZ) Governor Alan Bollard has, as anticipated, left the official cash rate (OCR) unchanged at 2.5 per cent.

The decision by the RBNZ indicatesNew Zealand’s strong local economy, Dr Bollard stating at his September Monetary Policy Meeting “If recent global developments have only a mild impact on theNew Zealand economy, it is likely that the OCR will need to increase”.

However, he outlined that “for now, given the recent intensification in global economic and financial risks, it is prudent to continue to hold the OCR at 2.5 per cent,” Dr Bollard said.

TheNew Zealand economy has been performing “relatively well” with headline inflation “increased somewhat” since the June RBNZ board meeting.

“At the same time, however, global economic and financial risks have increased.”

New Zealandbanks are currently well funded and are competing hard for business, and are expected to continue their competition for new business which is good news for home buyers.

If you are concerned about interest rate movements, book a free home loan assessment with an expert mortgage broker from Loan Market today. 

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