Bagrie: Hikes will be effective
Governor Graeme Wheeler left the rate at 2.5%.
But he said the country's economic expansion had significant momentum, commodity prices were high, confidence was strong and construction activity had been lifted by work in Christchurch and Auckland.
Economists had said there was a chance that Wheeler would raise the rate today but that it was likely he would choose to wait until March, when there will be more opportunity to explain the decision.
ANZ’s Cameron Bagrie had been expecting a 25 basis point hike today but said he was not surprised by the announcement. “It was always a moot point whether he’d go in January or March. He’s made it clear that he’s going in March so the 2.5% OCR is on borrowed time.”
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