New Zealand consumer prices fell for the first time in two years as fuel slumped, giving Reserve Bank Governor Graeme Wheeler scope to keep borrowing costs on hold for an extended period.
The consumers price index fell 0.2 percent in the fourth quarter from the previous three months, the first decline since the final quarter of 2012, Statistics New Zealand said in Wellington today. The median forecast of 15 economists surveyed by Bloomberg was for no change. From a year ago, prices rose 0.8 percent.
Benign inflation adds to signs Wheeler can keep the official cash rate unchanged at 3.5 percent as fuel prices tumble and economies in Japan and Europe remain under pressure. The Reserve Bank of New Zealand, which in December said it will eventually need to raise borrowing costs further, faces an extended period of inflation below the bottom of its 1 percent-to-3 percent target range.
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