Today the Monetary Policy Committee met for its final interest rate call of 2019. There were many predictions that the Reserve Bank would choose to cut the Official Cash Rate below one percent following the surprising 50-point interest rate cut in August.
However just after 2pm on Wednesday 13th November, the official media release from the Reserve Bank of New Zealand announced the committee had decided to keep the OCR at its current rate of 1.0 percent. The committee explained "Economic developments since the August statement was released do not warrant a change to the already stimulatory monetary setting at this time".
Members of the committee noted that employment currently remains close to its maximum sustainable level, while consumer price inflation remains below the 2 percent target mid-point but within the 1 to 3 percent target range.
It was decided that interest rates will need to remain at low levels for prolonged periods in order to ensure inflation will reach the mid-point of the Monetary Policy Committee’s target range.
The first Monetary Policy Statement and Official Cash Rate announcement for 2020 will be release on Wednesday 12th of February.
A full summary of the items discussed during today’s November meeting can be accessed here.