Reserve Bank of New Zealand leaves interest rate unchanged

Forex Pros – The Reserve Bank of New Zealand left its benchmark interest rate unchanged at 2.50%, it announced late Wednesday.

In a statement, that bank said it was leaving its overnight cash rate unchanged at 2.50%, broadly in line with expectations.

Commenting on the decision RBNZ Governor Alan Bollard said, "The outlook for the New Zealand economy remains very uncertain following February’s Christchurch earthquake.”

He also noted that, “Headline inflation is currently being boosted by recent increases in indirect taxes. Annual inflation is expected to settle comfortably within the target band once these tax increases drop out of the annual rate.”

“Given the outlook for core inflation and continued economic disruption stemming from the earthquakes, the current level of the OCR is likely to remain appropriate for some time,” Mr. Bollard added.

Following the announcement New Zealand's dollar was down against its U.S. counterpart, with NZD/USD shedding 0.19% to hit 0.8064.