Reserve Bank Governor Alan Bollard kept the official cash rate at a record-low 2.50% as expected, and said tame inflation data gave him breathing space to stick to his timeline of a mid-year rate hike.
The biggest news yesterday for borrowers was Moody's decision to upgrade New Zealand's banking sector. This means banks may end up paying less than before for money on the wholesale markets. We don't expect the Moodys announcement will bring rates down, rather it is more likely to slow the rate of increases.
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