WELLINGTON, Jan 31 (Reuters) - The New Zealand central bank held its benchmark cash rate steady at 2.5 percent on Thursday, as expected, saying an overvalued currency was keeping inflation in check, and pointed to the risk from a pick up in the housing market.
For the text of the Reserve Bank of New Zealand’s (RBNZ) latest statement click on.
All 17 analysts in a Reuters poll had expected no change at this review, with four seeing a rise in June, five picking sometime between September and December this year, and the remaining eight looking at 2014.
In the December monetary policy statement, the RBNZ pointed to signs of price pressures emerging from the housing market and earthquake rebuild.
Financial market pricing before Thursday’s decision implied negligible chance of a 25 basis points rate cut at this review, and 13 basis points of hikes over the next 12 months.
RBNZ governor Graeme Wheeler, a former managing director of the World Bank, has signed a policy targets agreement (PTA) with the government, largely similar to that under which his predecessor Alan Bollard operated.
However, it has a stated focus on keeping inflation around 2 percent within the established 1-3 percent band, and giving the governor leeway to tackle rises in asset prices.