Summary Falling world oil rices will have "a significant impact on prices", says bank governor
WELLINGTON (AFP) - New Zealand s central bank held interest rates at 3.5 percent Thursday and hedged on whether the next move would be up or down.
After previously forecasting a further increase, sentiment at the Reserve Bank of New Zealand has softened with inflation expected to fall and possibly become negative for a period this year before rising back towards 2.0 percent.
"In the current circumstances, we expect to keep the OCR (official cash rate) on hold for some time," bank governor Graeme Wheeler said.
"Future interest rate adjustments, either up or down, will depend on the emerging flow of economic data."
Falling world oil rices will have "a significant impact on prices", increase household purchasing power and lower the cost of doing business, he said.
However, in the agriculture-heavy economy, a reduced dairy payout, the risk of drought, and the high exchange rate will weigh on growth.
