By Stephen Wright
WELLINGTON, New Zealand--New Zealand's central bank said the economic outlook is improving as Covid-19 vaccinations increase globally but kept its policy tools unchanged at stimulatory levels to help safeguard the recovery.
The Reserve Bank of New Zealand on Wednesday left its cash rate at a record-low 0.25% and maintained a 100 billion New Zealand dollars ($72.2 billion) limit for its program of government bond purchases that aims to keep wholesale interest rates low.
A funding-for-lending program designed to ensure low-cost lending by banks was also left in place.
The RBNZ's statement said that meeting its inflation and employment targets will "necessitate considerable time and patience."
The central bank's forecasts, which are highly conditional, indicated that it won't raise interest rates until the July-September quarter of 2022. However, it was the first time the RBNZ had outlined a possible path for the cash rate since the initial shock of the pandemic, indicating that economic uncertainty is diminishing.
The New Zealand dollar jumped to 72.9 U.S. cents from 72.3 cents before the RBNZ policy statement.
New Zealand's economy has bounced back from the initial shock of the Covid-19 pandemic, helped by increased government spending that is forecast to more than double debt, stimulatory monetary policy and health measures that ensured few Covid-19 infections or deaths.
Write to Stephen Wright at stephen.wright@wsj.com
(END) Dow Jones Newswires
05-25-21 2251ET
