The Reserve Bank of New Zealand held its monetary policy meeting last week on Wednesday.

As widely expected, the central bank left the OCR unchanged at 1.75%.

It said that the New Zealand economy was improving as it was supported by a weaker exchange rate and rising commodity prices.

However, the central bank maintained the “ongoing uncertainties” which now also includes the potential overhaul of the RBNZ’s mandate.

“Monetary policy will remain accommodative”

“Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly,”

Gov. Spencer said in his statement.

Spencer also added that the exchange rate decline if sustained could help increase the tradables inflation and would ensure a more balanced growth for the economy.

Political Risk on NZD

The new Labor party government has pledged to also include a dual mandate of full employment to the RBNZ and in this aspect released its preliminary report.

The New Zealand dollar fell strongly, by nearly 6% since the elections that were held in September.

Investors shunned the kiwi dollar largely due to the new government policy on the housing markets, migration and the preference for stronger intervention in the currency markets.