The Reserve Bank of New Zealand on Thursday kept its Official Cash Rate unchanged at the record low of 1.75 percent for the 13th straight meeting.
The decision was in line with expectations following a 0.25 percent rate cut in November 2016.
The central bank has pared a collective 0.50 percent from its benchmark in the last 20 months, lowering the rate in six of the last 20 meetings after six straight sessions with no change.
The domestic economy has continued to improve in recent months, RBNZ Governor Adrian Orr noted.
“While GDP growth in the June quarter was stronger than we had anticipated, downside risks to the growth outlook remain. Robust global economic growth and a lower New Zealand dollar exchange rate is expected to support demand for our exports,” Orr said in a statement accompanying the decision.
Those downside risks include geopolitical risks and unexpected policies pertaining to major trading partners.
“Global inflationary pressure is expected to rise but remain modest. Trade tensions remain in some major economies, increasing the risk that ongoing increases in trade barriers could undermine global growth,” Orr said.
Orr also noted that domestic consumer prices are climbing towards the center of the central bank’s target range, thanks to higher fuel prices among other items.
So as the situation continues at an acceptable pace, he sees no reason to change policy in the near future.
“We will keep the OCR at an expansionary level for a considerable period to contribute to maximizing sustainable employment, and maintaining low and stable inflation,” Orr said.