A preview of the Reserve Bank of New Zealand announcement on monetary policy due on 11 December 2014
- The announcement is due at 2000GMT
- RBNZ governor Wheeler then gives a news conference at 2005GMT
- Wheeler then gets dragged in front of the parliament’s Finance Committee at 0010GMT
The Reserve Bank publishes its Monetary Policy Statement (MPS) quarterly, the December statement is due tomorrow.
Each Monetary Policy Statement must set out:
- how the Reserve Bank proposes to achieve its targets;
- how it proposes to formulate and implement monetary policy during the next five years;
- and how monetary policy has been implemented since the last Monetary Policy Statement
The previous MPS is here (PDF)
What to expect?
- Firstly – the official cash rate will remain steady at 3.5%
- A lowering of GDP, inflation and interest-rate forecasts
- In October the bank’s hiking bias was watered down, but not eliminated. This message will likely remain unchanged.
- The OCR rate is on hold but is expected to rise in coming years
- Thus, the bias to hiking will remain
- The rhetoric on the New Zealand dollar will be that it remains too high, at an ‘unjustified and unsustainable’ level
- There may be more comments on the housing market, given its recent renewed upturn.
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As a ps. The next RBNZ hike is not expected until H2 of 2015 at the earliest, and perhaps into Q4 2015
