Reserve Bank Of New Zealand Holds Cash Rate

rates_remain_low.jpgThe Reserve Bank of New Zealand (RBNZ) has left its official cash rate unchanged at 3 percent for a fourth consecutive review on Thursday, and said rates would stay low until the economy shows real signs of picking up.

It has held the rate steady since August last year after 25 basis point rises in both its June and July reviews.  It has previously said the soft and patchy domestic economic recovery, along with external risks, have justified holding rates steady.

The RBNZ is required to keep inflation between 1-3 percent on average over the medium term, and has said it will disregard the impact of a rise in sales tax which is expected to push the annual rate to around 5 percent by the middle of the year.

Recent data has shown the New Zealand economy unexpectedly contracted 0.2 percent in the third quarter as house prices and sales fell in December and core retail sales fell in November.

The RBNZs next monetary policy statement with updated economic forecasts will be released on March 10.

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