11 May 2017

OCR remains steady at 1.75 percent

10:36 am on 11 May 2017

The Reserve Bank has held its cash rate steady at a record low 1.75 percent, and pointed to only a gradual rise in interest rates.

09062016 Photo: RNZ/Rebekah Parsons-King. Governor of the Reserve Bank of New Zealand, Graeme Wheeler delievers lastest OCR annoucement.

Reserve Bank Governor Graeme Wheeler Photo: RNZ / Rebekah Parsons-King

No change had been expected and the bank's governor, Graeme Wheeler, said inflation had picked up but underlying price pressures were still subdued.

He said the economy was performing well and would be driven by immigration, domestic demand, and construction, while a weaker New Zealand dollar was helping exporters.

But Mr Wheeler said there were still uncertainties about the housing market and the international economy, which justified keeping interest rates on hold until 2019.

Despite the bank's neutral tone, economists expected it would be forced to start raising rates from the middle of next year.