Reserve Bank of New Zealand Official Cash Rate target left at 1.75%
- This was the expected decision
- Its the last for Acting Governor Grant Spencer (term ends on 26 March, incoming Governor Adrian Orr begins on 27 March)
- This is the final OCR decision under the existing Policy Targets Agreement (PTA) between the RBNZ Governor and the Minister of Finance - Orr will sign a new PTA before he starts. We should see details of the new PTA in coming days (ahead of March 27), it'll have some sort of 'full employment' mandate included.
Comments from the RBNZ:
- monetary policy will remain accommodative for a considerable period
- Numerous uncertainties remain, mon policy may need to adjust accordingly
- Domestic economy projected to strengthen
- strengthen
- Long term inflation expectations well anchored around 2%
- GDP was weaker than expected in Q4
- Labour market conditions continue to tighten
- Future headline inflation is expected to trend upwards, towards the mid point of the target band
- House price inflation remains moderate
- CPI inflation to weaken further near term - due to softness in food and energy prices, adjustments to government charges
Statement makes no mention of the NZ dollar
Here is the link to the full text
I bolded the bit from the statement on the Bank's expectation for near term inflation - so I guess if it does decline something to keep in mind is not freak out for a while .... there will probably be no response from the Bank.
And, just bigger pic ...... while there is a new Gov on the way, and a new PTA, and also changes to the RBNZ act coming ... policy will be largely a continuation. From what we know so far there will be more emphasis on 'full employment' but apart from that it appears steady as she goes. We'll soon find out.
--
NZD had a bigger response to the Fed (pre and post), RBNZ announcement cutting off a few pips and thats pretty much it so far
---
For background on this I posted previews:
