The Reserve Bank of New Zealand, in its meeting on the morning of Wednesday, July 14, kept the current interest rates unchanged at 0.25%, as expected, and announced the suspension of the additional LSAP asset purchase program of NZ$100 billion ($70 billion) by the 23rd. July 2021. The report issued by the bank showed that the New Zealand economy is still strong and that overall economic activity is higher than its levels before the effects of the Corona virus, and that household spending is at high levels.
The committee also confirmed that there will be increases in the near term in the main inflation of the consumer
price index in the second and third quarters affected by The rise of temporary factors such as the rise in oil prices.
The Monetary Policy Committee of the Reserve Bank of New Zealand considers that the additional asset purchase program known as LSAP has been an effective policy tool so far, but the conditions of the economy have improved since the start of the program, but it is no longer necessary, and members agreed that there is a decline in the risks of deflation and high unemployment rates.
The New Zealand economy is one of the fastest recovering economies from the spread of the Corona virus, which has allowed the economy to recover faster than other countries.
With the start of ending the asset purchase program from the Reserve Bank of New Zealand, market expectations rose that the bank would raise interest rates by the end of the year, and accordingly the New Zealand dollar rose after the statement by more than 80 points, to trade now at 0.7022 levels against the US dollar.
07/11/2024
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