In announcing its decision the Reserve Bank of New Zealand noted the downside risks to the outlook for global growth, as well as the weakening of domestic demand, and the short term impact of the Christchurch earthquake on the Canterbury region economy:
“Overall, continued GDP growth is expected to gradually absorb current surplus capacity over the next few years. Headline inflation is expected to move higher following the recent increase in the rate of GST. The subdued state of domestic demand suggests this inflation spike will have limited impact on medium-term inflation expectations.
“While it is appropriate to keep the OCR on hold today, it remains likely that further removal of monetary policy support will be required at some stage.”Over in Norway it was a similar story about the risks to the global economic outlook, but also a weakening in domestic inflationary pressures, but with relatively robust growth:
“Consumer price inflation has been lower than expected and inflation is projected to remain at around 1½ per cent in the period to summer 2011. At the same time, growth in the Norwegian economy is continuing at a moderate pace”, says Governor Svein Gjedrem. The outlook for the world economy is still highly uncertain. The expected upward shift in key rates abroad has been deferred further ahead and long-term interest rates are very low. “An overall assessment suggests that the key policy rate be kept unchanged at this meeting”, says Gjedrem.Finally in Poland, the most interesting aspect was the increase to the required reserve rate, which was one step towards monetary policy normalisation. The bank chose not to raise interest rates due to a lack of significant inflationary pressure, and the possibility of growing capital inflow to emerging economies such as Poland:
"In the Council’s assessment, the currently limited inflationary and wage pressure in the Polish economy and – not accounted for in the baseline scenario of the October inflation and GDP projection – the possibility of growing capital inflows to the emerging economies, including to Poland, amidst the extended period of expansionary monetary policy of major central banks, combined with the risk of further weakening of the global economic growth justify keeping the NBP interest rates unchanged."So the summary from these three central banks was more holding, waiting and watching as the post-great recession global economic recovery unfolds.