By Lucy Craymer
WELLINGTON (Reuters) -New Zealand’s central bank governor, Adrian Orr, said on Thursday that while the country was relatively well positioned to meet challenges inflation remains too high.
Orr added that the central bank had its eyes firmly focused on meeting its inflation target of 1% to 3%.
“New Zealand is relatively well positioned but inflation is still too high in an absolute sense,” he said in a speech to the Institute of Finance Professionals of New Zealand in Auckland. The speech was also posted on the central bank’s website.
New Zealand’s central bank in early October lifted interest rates to a seven-year high and promised more pain to come as it struggles to cool inflation at near three decade highs in an over-stretched economy.
Orr added that New Zealand’s financial system remains well placed to support the economy — with banks’ capital and liquidity positions strong, and profitability and asset quality high.
“However, there will be stresses in business and amongst households as interest rates and asset prices adjust,” he said.
New Zealand’s central bank is due to release its twice yearly Financial Stability report on Nov. 2.
(Reporting by Lucy Craymer; editing by Diane Craft and Sandra Maler)