- Graeme Wheeler, RBNZ Governor
The Reserve Bank of New Zealand tried to cool expectations of further cut of the official cash rate in light of low inflation, which currently stays around zero, saying "it would be inappropriate to attempt to offset the low oil price effect through the OCR". Instead, the central bank takes a longer term approach to inflation targeting. However, the RBNZ Governor Graeme Wheeler admitted that should concerns deepen around the global economy growth prospects and its effect on New Zealand, further policy easing may be needed over the coming year. Wheeler slashed the key interest rate four times last year to all-time low 2.5%. Nevertheless, inflation eased to 0.1% in the December quarter of 2015 as oil prices plunged. Wheeler, however, reiterated that it would take longer for consumer prices to return to the central bank's 1%-3% target range than previously estimated.
Meanwhile, a recent report showed that a decline in participation rate and a steep fall in the number of people unemployed in the fourth quarter brought the nation's jobless rate to the lowest level in more than six years, whereas economists had predicted a slight increase in the unemployment rate. The gauge dropped 0.7 percentage points to 5.3% in the reported period, the lowest since the March quarter 2009. Participation rate slid 0.3 percentage points to 68.4%, while 16,000 fewer people became unemployed.
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