RBNZ rate decision

Reserve Bank of New Zealand left cash rate unchanged at 1.75% as expected.

Bulletpoint of policy statement as followings:

  • Policy to stay accommodative for a considerable period of time
  • Domestic economic growth is expected to improve
  • Inflation expectation remains well anchored at around 2%
  • Lower NZD is needed
  • NZD has risen partly due to weak US dollar
  • See OCR at 1.8% in Dec 2017
  • See OCR at 1.9% in Dec 2018
  • See OCR at 1.9% in Dec 2019
  • See OCR at 2.1% in Sep 2020

A quick move higher in NZD from 0.7340 to 0.7365 as the statement was less dovish and hinting a 5bp hike by the end of the year