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UPDATE 1-New Zealand central bank keeps rates at 1.75 pct, worries remain over growing global uncertainty
March 22, 2017 / 8:48 PM / 9 months ago

UPDATE 1-New Zealand central bank keeps rates at 1.75 pct, worries remain over growing global uncertainty

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WELLINGTON, March 23 (Reuters) - New Zealand’s central bank stuck firmly to its stance of keeping interest rates at a record low of 1.75 percent at its meeting to set the official cash rate on Thursday and reiterated that it would stay on hold for a “considerable” period of time.

“Numerous uncertainties remain, particularly in respect of the international outlook and monetary policy may need to adjust accordingly,” Reserve Bank of New Zealand governor Graeme Wheeler said in a statement accompanying the decision.

All 32 economists polled by Reuters had expected no change to the bank’s official cash rate (OCR), which was lowered by 25 basis points to the current record low in November. Many are forecasting that rates will stay stable throughout 2017.

The New Zealand dollar barely moved after the announcement, edging down slightly to $0.7049 from $0.7059.

Just last month the central bank indicated that rates could remain unchanged for as long as two years, with external rather than domestic factors determining the outlook.

The RBNZ still considered the domestic economy resilient despite surprisingly soft gross domestic product growth last quarter, citing temporary factors.

However, global volatility and Donald Trump’s protectionist “America First” platform have been at the top of the list of risks-to-watch for the small, open trading economy, according to the RBNZ.

“As expected, again a clear intention to be as neutral as possible,” said Philip Borkin, senior economist at ANZ Bank.

“They’ve acknowledged some of the recent data surprises on GDP...but they’ve discounted those changes and haven’t altered their overall view,” he added.

The central bank will make its next rates decision on May 11.

For the text of the statement double click on (Reporting by Tom Westbrook and Charlotte Greenfield; Editing by Toby Chopra)

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