Prolonged Stimulus Needed to Meet Inflation, Employment Goals, RBNZ Says

WELLINGTON, New Zealand--New Zealand's central bank said prolonged monetary stimulus would be necessary to meet its inflation and employment goals during economic recovery from the Covid-19 pandemic.

The Reserve Bank of New Zealand, as expected, left its Official Cash Rate unchanged at 0.25% on Wednesday and maintained a 100 billion New Zealand dollars (US$73.45 billion) target for its market purchases of New Zealand government bonds.

Despite the pandemic's severity lessening and vaccination programs under way, the central bank said the global recovery was uneven.

New Zealand's economy suffered a record contraction in the second quarter of last year as a pandemic lockdown strangled consumer spending and business activity.

The economy rebounded explosively in the third quarter, but is thought to be contracting again as a border closure deprived the country of its lucrative tourism industry during peak season.

Write to Stephen Wright at stephen.wright@wsj.com


  (END) Dow Jones Newswires
  02-23-21 2035ET
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