WELLINGTON, Aug 31 (Reuters) - New Zealand's economy is recovering but it will be a slow and gradual process, the central bank governor said on Monday.
However, Reserve Bank of NZ governor Alan Bollard said it would be the make up of the recovery that would matter.
'The New Zealand economy is recovering, and for us really, it's not just the size of the recovery, it's the quality we'll be concerned about,' Bollard told Radio New Zealand.
Asked about financial markets pricing in a start of the tightening cycle from the middle of next year Bollard said markets were not always right.
He said the RBNZ would be 'clear cut' in its monetary statement on Sept. 10 about the future path of rates.
New Zealand has been in recession since the start of 2008.
The RBNZ left the rate at 2.5 percent for a second month in July, but threatened to cut rate further because a strong New Zealand dollar, which has gained more than 30 percent since March, was putting the fragile economic recovery at risk.
The central bank has cut rates by 575 basis points to a record low 2.50 percent, prompting lenders to lower their rates. It has been on hold since June, saying repeatedly since then that it will keep rates at the current level or lower until the latter part of 2010.
((Wellington newsroom tel 64 4 471 4234, fax +64 4 4736 212,
wellington.newsroom@reuters.com Keywords: NEWZEALAND ECONOMY/BOLLARD (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
However, Reserve Bank of NZ governor Alan Bollard said it would be the make up of the recovery that would matter.
'The New Zealand economy is recovering, and for us really, it's not just the size of the recovery, it's the quality we'll be concerned about,' Bollard told Radio New Zealand.
Asked about financial markets pricing in a start of the tightening cycle from the middle of next year Bollard said markets were not always right.
He said the RBNZ would be 'clear cut' in its monetary statement on Sept. 10 about the future path of rates.
New Zealand has been in recession since the start of 2008.
The RBNZ left the rate at 2.5 percent for a second month in July, but threatened to cut rate further because a strong New Zealand dollar, which has gained more than 30 percent since March, was putting the fragile economic recovery at risk.
The central bank has cut rates by 575 basis points to a record low 2.50 percent, prompting lenders to lower their rates. It has been on hold since June, saying repeatedly since then that it will keep rates at the current level or lower until the latter part of 2010.
((Wellington newsroom tel 64 4 471 4234, fax +64 4 4736 212,
wellington.newsroom@reuters.com Keywords: NEWZEALAND ECONOMY/BOLLARD (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.