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RBNZ holds OCR at 2.5% as expected; says will need to remove stimulus in future, but expects to hold OCR through the end of 2013
The Reserve Bank has held the Official Cash Rate (OCR) at 2.5% as expected, and has kept its guidance of unchanged rates through the end of 2013. However, the bank has sharpened its warnings about rapid house price inflation in Auckland and Christchurch and has indicated it is watching closely how that inflation spreads into the wider economy. “The extent of the monetary policy response will depend largely on the degree to which the growing momentum in the housing market and construction sector spills over into inflation pressures," Governor Graeme Wheeler said in an eight paragraph statement after the OCR ... (full story)