WELLINGTON (Reuters) – A New Zealand central banker on Wednesday said the official interest rate will tend towards neutral in the absence of future shocks to the system as pandemic-related disruptions fade.
“Given uncertainty, we will need to ‘feel our way’ as the (official cash rate) gets closer to our estimate of neutral,” Reserve Bank of New Zealand Chief Economist Paul Conway said in a speech.
“At 4.25%, the OCR is currently still restrictive, against Reserve Bank estimates of the long-term nominal neutral interest rate being between 2.5% and 3.5%.”
(Reporting by Lucy Craymer in Wellington and Renju Jose in Sydney; Editing by Chris Reese)
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