New Zealand central bank stands pat on policy, flags scope for more stimulus

[WELLINGTON] The Reserve Bank of New Zealand (RBNZ) on Wednesday held the official cash rate (OCR) at 1.0 per cent, as expected, but said there is scope for more fiscal and monetary stimulus to support the economy and maintain inflation and employment objectives.

"The Monetary Policy Committee agreed that new information since the August Monetary Policy Statement did not warrant a significant change to the monetary policy outlook," RBNZ said in a statement accompanying its rates decision.

The central bank stunned markets with a steep 50 basis-point cut in August, as policymakers sought to jolt the economy out of a sharp slowdown and protect it from the broadening impact of a bruising Sino-US trade war.

The New Zealand dollar turned positive, edging up 0.2 per cent to US$0.6335 after the on-hold decision, which was widely expected by markets.

REUTERS