几乎自2008年以来，房价每年下跌0.5%。目前，新西兰在经历了超出预期的价格下跌后，几乎陷入了通货紧缩。这给央行施加了压力，要求其将利率降至历史新低(Svensson, 2010)。消费者价格指数下跌0.5%，跌幅比实际预期高0.2%。这导致通货膨胀率上升到0.1%，这是自1999年新西兰经历通货紧缩以来的最低记录。目前，交易员有70%的机会降息，而最初的利率为26%。现金率没有变化的预期，而一些人预测现金率将降低(Castelnuovo&Surico, 2010)。
Almost since the year 2008, there had been a fall in prices by 0.5 per cent on annual basis. Currently, New Zealand has almost reached deflation after the fall in prices which was more than expected. This has heaped pressures over the Central Bank for cutting the rates of interest to a record that is freshly low (Svensson, 2010). The prices of consumer fell by 0.5 per cent and the drop was 0.2 per cent more than the actual anticipation. This resulted in pushing the rate of inflation to 0.1 per cent, and this record was lowest of all since the experience of deflation by New Zealand in the year 1999. Currently, traders hold a 70 per cent opportunity for cutting rates that increases from 26 per cent in the initial period. There is no expectation of change in the rate of cash, while some have predicted that the rate of cash will be lowered (Castelnuovo&Surico, 2010).
The key target is at the current settings of interest rate, even though it might be considered by the central bank for reducing the costs of borrowing further ahead if warranted by the circumstances. Irrespective of the weakness in prices, there are indications that the growth of economy may pick up, however, it is expected that no changes will take place in the rate of cash. The case is further ahead eased out being conditional to further deteriorate across the international economy, and there will be a need for setting it up against the reasonable pulse of solid domestic data since the recent months. The central view appears to be 2.5 per cent being lower than the overall cycle.