Reserve Bank of New Zealand Leaves Cash Target Rates steady at 2.50%

The RBNZ keeps its monetary policy unchanged at a record low 2.50%

As for the negative results that hurt the New Zealand economy after the earthquake, today the RBNZ governor Mr. Alan bollard kept the interest rates steady at their lowest level at 2.50% to revive the economy from its hurdle phase. 

The Reserve Bank of New Zealand released its rate decision, where the central bank decided to keep the interest rates steady at 2.50%, to support the economic recovery after the quake that hit New Zealand as well as to continue the rebuilding process. 

On the other hand, the trade balance of New Zealand recorded higher than expected surplus during April on the back of a recovery in exports and high demand from the Asian region, where the interest rates have been reduced by 50 basis points from the 3.00% to 2.50% on March to support the recovery of exports which exceeded imports significantly to record a surplus.. 

The government in New Zealand is still trying to support the economic recovery to return to the normal level through the starting second six months of the year. 

At the meantime, the New Zealand's Central Bank reported today that the economic growth in New Zealand to expand 0.3% during the first three months of 2011 after the economic activity showed some signs of recovery along with household spending expected to widen softly. The outlook for the New Zealand economy is improved. 

Economic growth in New Zealand has widened during the quarter of September to December, more than forecasts as the nation's exports soared along with stronger construction that helped the economy to ignore a recession, after the quake that hit the nation on February 22. 

There are signs indicate that the New Zealand monetary policy maker will keep the rates unchanged steady at 2.50% until this year due to the economic growth is to be slow. In March, Bollard cut the key rate by half a percentage point after earthquakes. 

For RBNZ point, the surging currency is a best way to contain the inflation rates among a good performance for the economic recovery after the hurdle phase that caused by the devastating earthquake. 

Unemployment rate came much better than forecasts giving signs of a healing labor sector that used to represent a major problem for the economy in the way out of the crisis. 

Falling unemployment and a record-low benchmark interest rate may help restore confidence and lift spending and investment later this year. Gross domestic product was “flat to slightly negative” in the three months through March after disruption caused by the 6.3 magnitude earthquake that wrecked buildings and closed the Christchurch central business district.