December 5, 2012 / 8:11 PM / in 5 years

New Zealand central bank holds rates as expected

WELLINGTON, Dec 6 (Reuters) - The New Zealand central bank held its benchmark cash rate steady at 2.5 percent on Thursday, as expected, and pointed to rising price pressures arising from the pick up in the earthquake rebuild.

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 one looking for a rise in the first quarter of next year, ten expecting the next move to be a rise between June and December next year, and five looking at 2014.

Financial market pricing before Thursday’s decision implied a 15 percent chance of a 25 basis points rate cut, and 19 basis points of cuts over the next 12 months.

The statement is the second by the new governor Graeme Wheeler, a former managing director of the World Bank, who succeeded Alan Bollard in September.

Wheeler has signed a policy targets agreement (PTA) with the government, largely similar to the PTA under which Bollard operated, but with the addition of 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.

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