Wednesday, Reserve Bank of New Zealand Governor Alan Bollard said the rise in longer-term interest rates is unwarranted and inconsistent with the monetary policy outlook.

Repeating the monetary policy statement released on March 12, Bollard said the economic recovery is expected to be very gradual and the risks around the outlook continue to be weighted to the downside.

As indicated in our March Statement, we are projecting interest rates to remain at relatively low levels for an extended period, Bollard said in a statement.

He noted that if this apparent distortion persists, it could put unnecessary pressure on the cost of borrowing by firms and households.

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