The Reserve Bank today pushed official interest rates to their lowest level in five years, slashing them by a remarkable 1.5 percentage points to 5 percent.
The central bank presented a grim picture of the economy caught up in global financial turmoil, while sounding largely relaxed about inflation risks, as well as indicating that today's interest rate decision would be the last big cut.
Reserve Bank Governor Alan Bollard said ongoing financial market turmoil and a marked deterioration in the outlook for global growth played a large role in today's decision.
Activity in most of New Zealand's trading partners was expected to contract or grow only very slowly in the next few quarters, meaning economic activity in this country would be further constrained than the Reserve Bank thought it would be in October.
source: tv 3
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