The official cash rate (OCR) has been held at 5.50% by the Reserve Bank of New Zealand today.
It brings to an end 12 consecutive increases in the OCR, and comes as some economists and commentators tipped the central bank may hold the rate.
"The level of interest rates are constraining spending and inflation pressure as anticipated and required," the bank said.
"The Committee agreed that the OCR will need to remain at a restrictive level for the foreseeable future, to ensure that consumer price inflation returns to the 1 to 3% annual target range, while supporting maximum sustainable employment.
"Global economic growth remains weak and inflation pressures are easing. This follows a period of significant monetary policy tightening by central banks internationally. Global inflation rates continue to decline, assisted by the normalisation of international supply chains, and the decline in shipping costs and energy prices. The weaker global growth has led to lower export prices for New Zealand's goods."
Expert prediction
"We’re seeing economic activity starting to cool, we’re seeing price measures and business surveys start to ease so we really think the Reserve Bank is going to say 'we think OCR settings are restrictive enough'," ASB senior economist Kim Mundy said yesterday.
Speaking to Breakfast earlier in the week, BusinessDesk investments editor Frances Cook said the Reserve Bank could be “done” with “ruthless hikes”.
Cook said while there was a chance the Reserve Bank could “shock us”, “pretty much everyone is expecting things to hold steady”.
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