Shadow Board recommends that the Reserve Bank keep the OCR on hold in February

The NZIER Monetary Policy Shadow Board recommends the Reserve Bank of New Zealand (RBNZ) keep the Official Cash Rate (OCR) at 2.25 percent in the upcoming February Monetary Policy Statement. Shadow Board members agreed that New Zealand’s economic recovery is starting to gain traction, but there remains a considerable degree of spare capacity in the economy, while headline inflation has increased. The general view was that the central bank should be cautious at this stage and wait for further data to assess how the economy will track over the coming months.