Kiwibank Economist Says New Zealand Central Bank’s Best Option Is to Hold Rates Steady

A Kiwibank economist said the Reserve Bank of New Zealand has strong reasons to keep interest rates unchanged at its July policy meeting. According to Jin10, Kiwibank chief economist Jarrod Kerr said that despite a new round of conflict erupting in the Middle East over the weekend, New Zealand markets generally believe the likelihood of a peace agreement is very high. Kerr said oil prices have fallen back to pre-war levels and demand appears likely to recover. He added that while New Zealand’s economy has been hit, it has not collapsed. He said the oil shock has slowed the pace of the economic recovery and has been enough to damage demand, but it has not fully derailed economic activity. Kerr said these conditions provide ample justification for the Reserve Bank of New Zealand to leave rates unchanged at its July meeting.