WELLINGTON (Reuters) - Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr said on Wednesday monetary policy was still effective at its current accommodative settings but needed to be paired with broader fiscal and structural reforms to work.
RBNZ cut the official cash rate (OCR) by a steep 50 basis points earlier this month.
"Our research gives us confidence that even at these low levels of interest rates, monetary policy remains as effective as ever at providing timely economic stimulus," Orr said.
Orr added the OCR cut reflected an expected decline in trading partner growth, weaker inflation expectations, lower interest rates internationally and a "funk" in global and domestic business confidence.
However, Orr expects a lower New Zealand dollar would promote export earnings.
(This story refiles to correct to clarify Orr's comment in paragraph 4 referred to business confidence not business conditions)
(Reporting by Praveen Menon; Editing by Sam Holmes)
