New Zealand central banker says Q1 core inflation was stable within target band

[WELLINGTON] New Zealand’s top central banker on Wednesday said that measures of core inflation in the first quarter had remained stable within its target band of 1 per cent to 3 per cent, adding that it remained focused on balancing inflation control while supporting an economic recovery.

“We remain ready to act decisively and in a timely manner if there are signs that short-term inflation is feeding into more persistent pressures, to ensure inflation settles sustainably at 2 per cent over the medium term,” Reserve Bank of New Zealand Governor Anna Breman said in a speech.

Breman said the monetary policy committee continues to keep a “close watch” on what is happening in the Middle East and incoming data to assess what that means for the New Zealand inflation outlook.

New Zealand’s central bank held the official cash rate at 2.25 per cent at its last monetary policy meeting in April but noted it was balancing the potential benefits of responding pre-emptively to the risk of higher medium-term inflation against the cost of unnecessarily stifling the economy.

Since then, New Zealand’s first-quarter inflation has come in at 3.1 per cent, slightly higher than the RBNZ’s expectation and outside the central bank’s target band. REUTERS