A widely expected decision, no surprise (OIS pricing was last at 95% probability of a hike).
Next up from the RBNZ, at 2105GMT, Graeme Wheeler (governor of the Reserve Bank of New Zealand) will face a news conference. As I said earlier, Wheeler is never shy of the opportunity to talk down the kiwi $, so watch out for that.
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Comments:
- Says high level of NZD is unsustainable
- Says important rates return to more neutral level
- Inflation seen in lower part of target band through 2014
- Sees annual CPI at 1.5% at end 2014, 1.9% at end 2015
- RBNZ says speed, extent of rate rise to depend on data and inflation
- Important that the Official Cash Rate (OCR) rises to more neutral level
- Inflation pressures in construction expected to be acute
- Higher migration gains for longer may need higher rates
- Says overall inflation remains moderate
- Lowers March 2015 annual GDP growth to 2.7% from 3.2%
- Sees inflation reaching 2% in Q2 2015 vs. Q2 2014
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Quick headline comments via Reuters and Bloomberg
