OCR

The Reserve Bank yesterday rightfully maintained a firm line by keeping the official cash rate at 3%, BNZ economist Craig Ebert said.

The Reserve Bank is widely expected to keep its official cash rate unchanged at 3% on Thursday, and it is likely to stay there for an extended period.

The Reserve Bank is expected to leave the interest-driving official cash rate at 3% on Thursday in the wake of the failure of South Canterbury Finance and the earthquake which has devastated Christchurch.

The Reserve Bank has edged its key interest rate up, after holding it at a record low for 13 months to fight the impacts of the global financial crisis.

The fall in unemployment to 6% in the year ended March was being celebrated throughout New Zealand yesterday as a sign the labour market was finally following the rest of the economic recovery.

The Reserve Bank held off increasing its official cash rate yesterday, bringing good news for investors but bad news for homeowners needing to refinance fixed-term mortgages in the future.