Low Interest Rates Continue

Once again interest rates remain at historically low levels making investment in property more and more profitable and savings less and less attractive.

In my view low interest are here to stay  and investors can buy in confidence safe in the knowledge that  this is as good as it gets.

Constant threats to raise interest rates now ring hollow, and in this months RB statement raising rates isn’t even mentioned.


26 January 2012 (Bob Dey report)
The Reserve Bank left the official cashrate unchanged at 2.5% today.

Bank governor Alan Bollard said: “Since the time of the Decembermonetary policy statement, financial market sentiment has improved slightly, with increased liquidity in European financial markets. However, the global economy remains fragile and risks to the outlook remain.

“World prices for New Zealand’s export commodities have remained elevated but the recent appreciation of the $NZ is reducing exporters’ returns. The European debt crisis has also increased the cost of international funding, which will likely pressure funding costs for New Zealand banks over the coming year.

“In the domestic economy, we continue to see modest growth. Over recent months there have been signs of a limited recovery in household spending and the housing market. Further ahead, repairs & reconstruction in Canterbury will also provide a significant boost for an extended period, though there may be further delays resulting from the aftershocks.

“Reassuringly, inflation pressures have remained well contained. Inflation has declined and now sits below 2%.

“Given ongoing uncertainty around global conditions and the moderate pace of domestic demand, it remains prudent to keep the cashrate on hold at 2.5%.”

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