Interest rates forecast to stay low
Reserve Bank Governor Alan Bollard held the official cash rate at 2.50% today, as expected, and reiterated his view that the rates will stay low until the end of next year.
Thursday, September 10th 2009, 9:00AM
by Paul McBeth
This is in contrast to the markets which have been suggesting rate rises early next year.
In the statement he said: "As we have said previously, the forecast recovery in economic activity is based on monetary policy continuing to provide substantial support to the economy. We expect such support will be needed for some time.
"As a result, we continue to expect to keep the OCR at or below the current level through until the latter part of 2010."
Bollard said the kiwi dollar's strength is a threat to the recovery.
The economy will climb out of recession in the third quarter, the Treasury said this week, ending a six-quarter contraction that's slashed company earnings, eroded government tax revenue and driven up unemployment.
Paul is a staff writer for Good Returns based in Wellington.
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