New Zealand's central bank can make further monetary policy easing to boost economic situation, the Organisation for Economic Co-operation and Development, or OECD, said Thursday.

It its Economic Survey of New Zealand, the OECD said, The Reserve Bank still has room to go further in responding to deteriorating economic conditions. Falling core inflation and easing inflation expectations further increases monetary policy leeway, it added.

The central bank has lowered its policy interest rate by 5.25 percentage points since July 2008, to 3% currently.

The report said given the downtrend seen in macroeconomic indicators in early 2009, it became clear that New Zealand would not escape a deeper recession this year.

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