New Zealand's central bank reiterates more easing to come

[WELLINGTON] New Zealand's central bank reiterated on Tuesday that further policy easing will be needed to ensure that the inflation rate increases and settles near the middle of its target range.

The central bank is mandated with keeping annual inflation at between one and 3 per cent. The annual rate was 0.4 per cent in the second quarter.

In a speech, Assistant Governor John McDermott said that September quarter inflation, to be announced Oct 18, is expected to be low.

The central bank kept the official cash rate (OCR) on hold at 2 per cent in September but left the door open for more rate cuts.

"As described in the September OCR review, monetary policy will continue to be accommodative," said Mr McDermott.

"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," he said.

REUTERS