The New Zealand Reserve Bank said Thursday it would keep the official interest rate at 2%, but signaled that a cut was likely later in the year. "Our current projections and assumptions indicate that further policy easing will be required to ensure that future inflation settles near the middle of the target range (of close to 2%)," Governor Graeme Wheeler said. 

The bank cut the official interest rate to 2% in August, in an unsuccessful bid to weaken the New Zealand dollar. Wheeler said weak global conditions and low interest rates relative to New Zealand continued to place upward pressure on the New Zealand dollar exchange rate, impacting the export sector.  "A decline in the exchange rate is needed," he said. 

Wheeler said domestic growth continued to be supported by strong net immigration, construction activity, tourism and an accommodative monetary policy but warned excessive house price inflation was posing concern for financial stability.

Source : QNA