The Reserve Bank has announced the Official Cash Rate (OCR) will remain unchanged at 1.75 per cent.
Acting governor Grant Spencer said global economic conditions were improving, and growth was expected to pick up, although inflation and wage outcomes remain subdued. The Reserve Bank had also incorporated preliminary estimates of the impact of the proposed KiwiBuild programme, tighter visa requirements and increases in the minimum wage.
Spencer said, "The impact of these policies remains very uncertain."
House price inflation has moderated due to loan-to-value ratio restrictions, affordability constraints, reduced foreign demand, and a tightening in credit conditions. Low house price inflation is expected to continue, reinforced by new government policies on housing.
Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly.