Reserve Bank holds OCR at record low 0.25%

It acknowledged the economy has performed better than expected but said recovery here and around the world was uneven and the outlook uncertain, as it would take time for Covid-19 vaccination programmes to have an effect.

“Economic activity in New Zealand picked up over recent months, in line with the easing of health-related social restrictions. Households and businesses also benefited from significant fiscal and monetary policy support, bolstering their cash-flow and spending,” it said in a statement.

“This ongoing uncertainty is expected to constrain business investment and household spending growth. ”

The RBNZ’s monetary policy committee said the central bank was still short of reaching its targets of sustainable employment and inflation about 2 per cent, and that would mean it would stick with its $100 billion bond buying programme, which aims to keep pressure on interest rates.