NZ central bank holds key interest rate

The Reserve Bank, which slashed the official cash rate to 2.5 percent from 8.25 percent between July 2008 and late April 2009, said Thursday that it will likely begin hiking interest rates from midyear.

“If the economy continues to recover in line with our December projections, we would expect to begin removing policy stimulus around the middle of 2010,” bank governor Alan Bollard said. The decision to hold the rate was widely anticipated by markets.

Like the global economy, New Zealand continues its recovery, but with business spending still weak, households cautious and credit growth subdued, he noted.

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