28 Oct 2014

Reserve Bank expected to hold rate

7:16 am on 28 October 2014

Economists are expecting a dovish statement from the Reserve Bank on Thursday after inflation in the September quarter turned out to be less than half the central bank's forecast.

Reserve Bank governor Graeme Wheeler

Reserve Bank governor Graeme Wheeler Photo: RNZ

The Reserve Bank was not going to raise its Official Cash Rate again this year but, with the annual rate of inflation sitting at just 1 percent, expectations are it will be on hold for longer.

The central bank aims for a 2 percent annual inflation rate.

The head of research at the Bank of New Zealand, Stephen Toplis, said Reserve Bank governor Graeme Wheeler will not be happy that his organisation is over-forecasting inflation.

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