About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Wednesday, November 20th, 6:13PM
rss
Latest Headlines

OCR decision revealed

The Reserve Bank has kept the Official Cash Rate on hold at the record low of 1.5%. Here's why.

Wednesday, June 26th 2019, 1:47PM 3 Comments

The Reserve Bank said: 

The Official Cash Rate (OCR) remains at 1.5 percent. Given the weaker global economic outlook and the risk of ongoing subdued domestic growth, a lower OCR may be needed over time to continue to meet our objectives.

Domestic growth has slowed over the past year. While construction activity strengthened in the March 2019 quarter, growth in the services sector continued to slow. Softer house prices and subdued business sentiment continue to dampen domestic spending.

The global economic outlook has weakened, and downside risks related to trade activity have intensified. A number of central banks are easing their monetary policy settings to support demand. The weaker global economy is affecting New Zealand through a range of trade, financial, and confidence channels.

We expect low interest rates and increased government spending to support a lift in economic growth and employment. Inflation is expected to rise to the 2 percent mid-point of our target range, and employment to remain near its maximum sustainable level.

Given the downside risks around the employment and inflation outlook, a lower OCR may be needed.

Tags: RBNZ Reserve Bank

« 10 market predictions for the rest of 2019OCR on hold: economists predict August cut »

Special Offers

Comments from our readers

On 26 June 2019 at 3:26 pm Winka said:
When an OCR is at 5%, there is a 5% (100%) ability to reduce to 0%.
If the OCR is at 5% and you reduce it by just 1.5% you have reduced it by 25%

If you have an OCR at 1.5% and reduce it by 1.5% you have reduced it by 100%

So now that we have an OCR at 1.5% we are left in a position where when (not 'if') there is a major downturn and the Reserve Bank is expected to act with an interest-rate-remedy, they are going to be 'stymied' for a truly effective solution for a remedy?

'Monetary' and 'fiscal'policies are distinctly different animals.

By trying to manipulate the natural (economic) cycles with 'monetary' policies (reducing OCR's) is a wee bit like turning on the heater in winter in the distorted belief that you are sort of 'skipping' winter and creating an eternal summer!

When the OCR is so low the RB loses any effective ability to stimulate growth in a large & extended recession (or depression) because once the OCR is at 0% there is a deflationary problem.

Playing around with natural cycles (such as economic, or natural climate cycles) with respectively; interest rates or heaters, must only stall the inevitable and probably compound the magnitude of each?

Fiscal policies are one of the only other tools left and this includes extra taxes.

Over-compliance is a form of this sort of policy, and I have covered this fact in a recent comment on GR.
Scaffolded buildings with white plastic-wrap, mostly resulting from central government directing local government (councils) to apply mostly 'over-the-top' new compliance regulations which seem to be seen as an attempt to condition us into believing that we have a booming economy?
A report recently stated that 67% of the scaffold/white plastic-wrap 'construction'we see around our towns & cities has been attributed to the demands of this over-compliance?
Several are of the opinion that it is actually much higher than 67%.

Many people simply cannot imagine life without the normal scaffold/plastic-wrap landscape.

So what day is the downturn going to happen?
Is the predicted downturn due on or about the day that all the new compliance work is completed?
Or will we experience a new 'heater' in the form of 'new' new-compliance?

Maybe just sit back and use the approach of 'she'll be right' until we only realise at the moment the heater is switched off that there is no such thing as the 'eternal summer'..... although those who inhabit places such as the Sahara may dispute that claim, and scoff at us as we struggle with the flooding blimmen rain?

Keep a good keen eye on the OCR 'heater switch' however, be more mindful of the signs of why it may be switched as a 'remedy' in an attempt to control the cycles of time?

Time will prove this correct....or not!
On 27 June 2019 at 11:32 am jimmynz said:
Winka - I have absolutely no idea where you are going with this. What is the actual purpose and point of your comment please?
On 28 June 2019 at 10:48 pm Winka said:
aha jimmynz
If there is hardly any effective room left in being able to reduce the OCR and if you understand cycles and where we are and where we are going to be soon, then you would be expected to know quite clearly the purpose of my comments.
However...maybe this time I could be wrong in reading cycles.
And equally wrong in my references to (over) compliance in it's many guises.

what is it that you appear to struggle with in the above?

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • When is a client really a client?
    “And this subtle upgrade to the understanding of a complaint. Which changes the ISO definition from an expression of dissatisfaction...”
    2 days ago by JPHale
  • When is a client really a client?
    “Just released additional standards from the FMA. Record keeping potentially until 7 years after the death of the life...”
    2 days ago by JPHale
  • When is a client really a client?
    “@ReganT interesting that the two life advisers involved with the code working group discussion are the ones being argued...”
    3 days ago by JPHale
  • When is a client really a client?
    “In a previous reply I responded to the concept of payment as a trigger. I actually agree it’s not. While we don’t often...”
    3 days ago by regant
  • When is a client really a client?
    “Tash are you being deliberately obtuse? I didnt say you have to keep sending/giving disclosure every year, I said you have...”
    3 days ago by regant
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

Last updated: 15 November 2019 4:16pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com