WELLINGTON, June 13 The New Zealand central bank
held its benchmark cash rate steady at 2.5 percent on Thursday,
as expected, and said it expected to hold rates for the rest of
the year as it saw inflation risks staying contained even as
economic growth picked up.
For the text of the Reserve Bank of New Zealand's (RBNZ)
latest statement click on.
All 16 analysts in a Reuters poll had expected no change at
this review, with three seeing a rise sometime between September
and December this year, and the remaining 13 looking at the
first quarter of 2014.
The RBNZ said domestic economy was improving with consumers
spending more, and earthquake reconstruction in Christchurch
gathering pace, but renewed its warning about rising house
prices and the risk to inflation and financial stability.
It has also warned about an overvalued currency, and how it
is making the rebalancing of the economy difficult.
Financial market pricing before Thursday's decision implied
no chance of a 25 basis points rate move, and 36 basis points of
hikes over the next 12 months.
The official cash rate has been held at 2.5 percent since an
emergency 50 basis point cut in March 2011 after the earthquake.
RBNZ governor Graeme Wheeler has said his focus is on
keeping inflation around 2 percent within the established 1-3
The bank is finalising a set of supplementary
macroprudential tools, such as controls of low-deposit loans,
increased reserves, and capital buffers to control the housing
New Zealand's official rate compares with Australia's 2.75
percent, the U.S. Federal Reserve's 0.0/0.25 percent, the
European Central Bank's 0.5 percent, and the Bank of Japan's