NZ INFLATION SLOWS SHARPLY, RATES SEEN LOW FOR LONGER.
New Zealand's annual inflation unexpectedly fell in the December quarter as food prices dropped, giving the central bank plenty of leeway to keep interest rates at a record low as global risks threaten to derail a limp recovery in the domestic economy. The consumer price index fell 0.3 percent in the three months to Dec 31, to be 1.8 percent higher than a year ago, data showed. That was the first decline in two years. Analysts polled by Reuters forecast a rise of 0.4 percent for the quarter and 2.6 percent from a year earlier, in line with the Reserve Bank of New Zealand's (RBNZ) forecasts. New Zealand has seen soft price pressures over the past year, leaving aside the one-off impact of a rise in the government sales tax in October 2010.