New Zealand’s central bank has kept its official cash rate (OCR) at 1.0%, a record low, CNBC reports.
The OCR is the rate of interest which determines the charges on overnight loans between commercial banks.
The central bank only last month surprised investors with a 50-basis-point cut. The bank maintained this week the possibility of yet further monetary and fiscal stimulus to prop up the economy in the face of global trade tensions.
RBNZ stated that increased government spending coupled with historically low interest rates are expected to facilitate a pick-up in domestic demand over the coming years.
GDP grew much faster than expected in the second quarter of 2019, but pressure for more central bank interventions remain.
The RBNZ stated:
The Monetary Policy Committee agreed that new information since the August Monetary Policy Statement did not warrant a significant change to the monetary policy outlook. There remains scope for more fiscal and monetary stimulus, if necessary, to support the economy and maintain our inflation and employment objectives.