The economists view on the OCR

ABS's Nick Tuffley

The RBNZ kept the OCR on hold.  Although it seems more comfortable the economy will hold up in the wake of the earthquake, the high NZD and oil prices were seen as "unwelcome".

Growth: a little more confident

The RBNZ noted the drop in confidence following the earthquake, and the subsequent recovery in part buoyed by the cut in the OCR.  While firms and households in Christchurch remain adversely affected, the RBNZ noted that the rest of the country seems relatively unaffected.  This is an encouraging sign the remainder of the economy is holding up well despite the earthquake.  Indeed, housing market activity (particularly in Auckland) and business investment has started to increase outside of Christchurch.