"The current level of interest rates is constraining spending and hence inflation pressure, as anticipated and required," said a statement of the RBNZ Monetary Policy Committee.
The committee agreed that the OCR needs to stay at restrictive levels for the foreseeable future to ensure annual consumer price inflation returns to the 1 percent to 3 percent target range while supporting maximum sustainable employment, it said.
New Zealand Labor shortages are easing as overall demand softens and immigration adds to labor resources, it said, adding that headline inflation and inflation expectations have declined, but measures of core inflation remain too high both domestically and overseas.
Last month, the Reserve Bank announced to leave the OCR unchanged at 5.5 percent, putting an end to the consecutive increases and monetary policy tightening over the past 21 months.
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