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- The RBNZ has reviewed the policy today, with a brief statement (no quarterly statements are scheduled, no prospective OCR guidelines or press conference, these are scheduled for May 8th).
- As expected, a steady hand at 1.75% was held.
Although the December GDP report revealed that domestic demand was strong and inflation expectations were just over 2% with the maximum sustainable jobs achieved, Governor Orr was expected to repeat the February MPM outline: until 2019 and 2020. The direction of our next OCR move could be up or down, "with a limited change in the February 13 statement . USD was at 0.6908 in the ad – but … it is now trading at 0.6823.
Result of the RBNZ:
- Keep expansionary for a considerable period.
- The next rate change is probably going down – it's a change that hangs over the bird.
- The balance of risks has fallen.
RBNZ … (said):
It is more likely that the direction of our next OCR move is down;
Said that employment is close to its maximum sustainable level;
Holds that the global economic outlook has continued to weaken;
Says expects low interest rates, an increase in public spending and investments to support growth compared to 2019;
Indicates weaker global economic outlook and slowing spending behind the reversal of the rate outlook;
It is expected an easier policy in other countries, exerting upward pressure on the NZD.
Key notes:
About the rate statement and the RBNZ rate decision:
The interest rate decision of the RBNZ is announced by the Reserve Bank of New Zealand. If the RBNZ is keen on the inflationary outlook for the economy and raises interest rates, it is positive or bullish for the NZD. The RBNZ rate return contains explanations of the interest rate decision and comments on the economic conditions that influenced it.
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