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Reserve Bank Keeps Official Cash Rate at 5.5% Amidst Inflation Concerns

Reserve Bank Keeps Official Cash Rate at 5.5% Amidst Inflation Concerns

The Reserve Bank of New Zealand has maintained the official cash rate (OCR) at 5.5%, marking the fourth consecutive decision to hold firm. This comes

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The Reserve Bank of New Zealand has maintained the official cash rate (OCR) at 5.5%, marking the fourth consecutive decision to hold firm. This comes despite signs of a slowdown in inflation, which is currently at 5.6%, down from a peak of 7.3% measured 15 months earlier. The central bank is confident that the current OCR level is restraining demand. However, it emphasizes concerns about ongoing excess demand and inflationary pressures. The Monetary Policy Committee emphasizes the need for interest rates to stay at a restrictive level for an extended period to bring consumer price inflation back to the target range of 1 to 3 percent and support sustainable employment. Kiwibank’s chief economist suggests that the Reserve Bank has taken sufficient measures to cool the economy, and monetary policy is effectively working, despite ongoing challenges.

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