March 2010

The OCR is still at 2.50%, the lowest rate ever, and now well below official Australian rates for the first time since 2003.

The official cost of money has started to fall significantly. But the RBNZ is doing this to mitigate the overall rise in risk premiums.

We are now starting to see a return to a more normal rate curve - that is, where longer term rates are higher than shorter term ones.

The economy may now be out of recession - but only just - and it now looks like a low and slow growth period may extend forward for quite a long time.

Further falls in the OCR seem less likely now, and as business demand weakens, the availability of international credit will become limited. Markets are now thinking official interest rates will rise from here.

For more detailed data, see the extensive resources at www.interest.co.nz

for more perspectives, see

- Exchange rates
- Commodity prices
- Farm cost indexes
- Interest rate trends
- Rural credit aggregates
- Farm sales activity
- International dairy prices

for saleyard and processor price trend graphs, see

- lamb
- beef
- deer
- velvet

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