Reserve Bank keeps OCR at 1.75 percent

Posted 3 years ago by Craig Pope

The Reserve Bank has today announced there will be no change to the Official Cash Rate (OCR). The announcement came as no surprise—the OCR has remained unchanged since late 2016 when it dropped to an historically low 1.75 percent.

"Monetary policy remains easy in the advanced economies but is gradually becoming less stimulatory," said Reserve Bank Governor Grant Spencer.

"The exchange rate has firmed since the November Statement, due in large part to a weak US dollar. We assume the trade weighted exchange rate will ease over the projection period".

"GDP growth eased over the second half of 2017 but is expected to strengthen, driven by accommodative monetary policy, a high terms of trade, government spending and population growth. Labour market conditions continue to tighten. Compared to the November Statement, the growth profile is weaker in the near term but stronger in the medium term."

The general forecast is that there may be no change until early next year.

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