Reserve Bank keeps OCR at record low

Reserve Bank Governor Graeme Wheeler (Getty)
Reserve Bank Governor Graeme Wheeler (Getty)

In its first announcement for 2017, the Reserve Bank of New Zealand kept the official cash rate (OCR) at a record low.

Outgoing Governor Graeme Wheeler made the announcement on Thursday morning that the OCR will remain at 1.75 percent.

The OCR was dropped to the record low in November last year in a bid to stimulate inflation.

In his statement, Mr Wheeler said headline inflation had returned to the bank's target band of 1 percent to 3 percent and was expected to anchor around the 2 percent midpoint in the longer term.

However, he lamented the ongoing strength of the New Zealand dollar.

"The exchange rate remains higher than is sustainable for balanced growth and, together with low global inflation, continues to generate negative inflation in the tradables sector. A decline in the exchange rate is needed."

Earlier this week, Mr Wheeler and his deputy Grant Spencer, announced their intention to leave their roles.

The Governor's five year term ends on September 26 - three days after the general election - while Mr Spencer will fill in until the Government finds a replacement.

NZN / Newshub.