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Reserve Bank holds OCR at 0.25 per cent
The Reserve Bank Monetary Policy Committee has agreed to keep the Official Cash Rate (OCR) on hold at 0.25 per cent in light of the COVID Delta variant outbreak.
Reserve Bank Governor Adrian Orr says the decision was made in light of the Government's imposition of Alert Level 4 COVID restrictions on activity across the country.
However, the Reserve Bank has made it clear that a rise in interest rates has only been delayed.
Monetary policy has been working alongside government spending to support New Zealand’s economic recovery.
While the recent move to Alert Level 4 will restrain activity, the impact will depend on the length of time restrictions are in place and the responses of households and businesses.
The effectiveness of the Wage Subsidy Scheme and the adaptability of businesses and workers during 2020 shows New Zealand can recover quickly from these periods of restrictions.
Combined with strength in inflation and the labour market, it is expected monetary policy will need to provide less stimulus in order to meet its inflation and employment objectives.
Read more about the Reserve Bank’s decision here.
Monday, August 23, 2021