New Zealand's Reserve Bank has revealed it has taken action to keep interest rates down in the money markets amid ongoing concerns about the European debt crisis.
The central bank says it has pumped money into the accounts it holds on behalf of the trading banks in recent weeks.
Trading banks hold cash in accounts at the Reserve Bank to settle transactions between their clients and those of other banks.
As of Tuesday this week, $8.5 billion was sitting in those accounts, up $2 billion in a fortnight.
In a statement on Friday, the Reserve Bank says it pumped an unspecified amount of cash into the accounts to relieve upward pressure on overnight interest rates on the local money market.
BNZ treasurer Tim Maine says the action appears to be a precautionary step to ensure that the banking system continues to run smoothly if Europe's debt problems worsen and global money markets go into meltdown.
