2018.02.0716:15:00UTC+00RBNZ Keeps Official Cash Rate Unchanged At 1.75%

The Reserve Bank of New Zealand on Thursday maintained its Official Cash Rate at the record low of 1.75 percent for the eighth 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 16 months, lowering the rate in six of the last 18 meetings after six straight sessions with no change.

The global economy has continued to improve in recent months, RBNZ Governor Graeme Wheeler noted.

"While global inflation remains subdued, there are some signs of emerging pressures. Commodity prices have increased, although agricultural prices are relatively soft. International bond yields have increased since November but remain relatively low. Equity markets have been strong, although volatility has increased recently. Monetary policy remains easy in the advanced economies but is gradually becoming less stimulatory," Wheeler said in a statement accompanying the decision.

He also noted that the exchange rate has firmed slightly, due in part to a weaker U.S. dollar - although the exchange rate is expected to ease over time.

"GDP growth eased over the second half of 2017 but is expected to strengthen, driven by accommodative monetary policy, a high terms of trade, government spending and population growth. Labor market conditions continue to tighten," Wheeler said.

Annual inflation remained subdues in the third quarter but still remains well within the target range, the bank said.

Longer term inflation was lower than expected at around 1.6 percent, although the forecast suggests an upward trend - anchored at around 2 percent.

"Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain, and policy may need to adjust accordingly," Wheeler said.