WELLINGTON, June 22 (Xinhua) -- New Zealand's central bank left its official cash rate (OCR) unchanged at 1.75 percent on Thursday.
"Global economic growth has increased and become more broad-based, but major challenges remain with on-going surplus capacity and extensive political uncertainty," said Reserve Bank of New Zealand governor Graeme Wheeler.
Headline inflation has increased over the past year in several countries, but moderated recently with the fall in energy prices, Wheeler said in a statement, adding that core inflation and long-term bond yields remain low, and monetary policy is expected to remain stimulatory in the advanced economies, but less so going forward.
The trade-weighted exchange rate has increased by around 3 percent since May, partly in response to higher export prices, he said, adding that a lower New Zealand dollar would help rebalance the growth outlook towards the tradables sector.
Gross domestic product growth in the March quarter was lower than expected, with weaker export volumes and residential construction partially offset by stronger consumption, Wheeler said.
Nevertheless, he said that the growth outlook remains positive, supported by accommodative monetary policy, strong population growth, and high terms of trade, adding that recent changes announced in Budget 2017 should support the outlook for growth.
