Reserve Bank Assistant Governor John McDermott, speaking to the New Zealand Institute of Chartered Accountants CFO and Financial Controllers Special Interest Group in Auckland

Also:

  • Says the NZ rate considered as ‘neutral’ has fallen
  • Due to global conditions and productivity effect, lower neutral rate reflects weak prductivity growth
  • Says lower neutral rate to impact households over time

“Lower neutral interest rates imply that the interest rates faced by household and businesses over the longer haul are likely to be lower than in the past. But interest rates will still need to be adjusted in response to the state of the economy,”

  • The Bank’s projections suggest the level of the nominal 90-day interest rate that achieves this is about 4½ percent

Comments over the wires and on the RBNZ website