Reserve Bank governor Graeme Wheeler has left the Official Cash Rate unchanged at 1.75%.
He notes that major changes are unlikely at this stage.
“Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly,” he told a media briefing.
In his analysis of the world economy, he notes global economic growth has become more broad-based in recent quarters.
“However, inflation and wage outcomes remain subdued across the advanced economies, and challenges remain with on-going surplus capacity.”
He says a lower New Zealand dollar is needed to help deliver more balanced growth.
However, prospects for the country’s economic growth look positive, with support from accommodative monetary policy, Budget 2017 announcements and strong population growth.
There also remains a risk of resurgence in house prices given continued strong population growth and resource constraints in the construction sector, while longer-term inflation expectations remain at about 2%.
