OCR unlikely to rise soon

The Official Cash Rate (OCR) will remain unchanged at 2.50 per cent for now and could go even lower, the Reserve Bank announced recently.

Reserve Bank Governor Alan Bollard said that despite signs of a levelling off in economic activity, the economy remains weak.

“We continue to expect to see a patchy recovery get underway toward the end of the year, but it will be some time before growth returns to healthy levels”, Governor Bollard said.

He added that in the interim, the Bank will continue to provide substantial monetary policy stimulus to the economy.

“The OCR could still move modestly lower over the coming quarters”, he said.

“We continue to expect to keep the OCR at or below the current level through until the latter part of 2010.”