Following the disastrous earthquake in Christchurch back in February, it comes as no surprise that the official cash rate (OCR) for New Zealand has been affected. The OCR remains unchanged at just 2.5%, which means that the country’s economic outlook is looking uncertain.

The earthquake killed nearly 200 people and devastated Christchurch, New Zealand’s second largest city. Consumer spending, business confidence and tourism have also seen a sharp decline following the earthquake which measured a 6.3 magnitude, according to the Reserve Bank of New Zealand.

Alan Bollard, the Central Bank Governor, says that “The current level of the OCR is likely to remain appropriate for some time.” He also added that the outlook for the economy “remains very uncertain following February’s Christchurch earthquake.”

The central bank has stated that they will be keeping interest rates low in order to help with the economic recovery. It is expected that the rate will be kept at a minimum until next year. People have curbed their spending, and therefore the demand has decreased, but there is now room for the economy to start to grow.

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