RBNZ's McDermott: If NZD TWI moves up, expect different language from the Bank

Author: Eamonn Sheridan | Category: Central Banks

Reserve Bank of New Zealand Assistant Governor McDermott

These via Reuters :
  • Says range of risks to outlook mean equal probability next move could be cut
  • Little change in view on inflation for last few quarters
  • Core inflation still needs a little shove to get it towards midpoint of target range
  • Says non-tradeable inflation, inflation expectations key influences on OCR track
  • Weakness against USD not what we anticipated; question is will it last
  • Comfortable with TWI moves, not enough to move us from current strategy
  • If TWI kept moving up and was following trend, think RBNZ would start using different language
  • GDP revisions suggest speed limit for economy moved up to near 3 pct before inflation generated
  • Says equity market volatility considered at meeting, not material at moment

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Adding a little to the earlier comments from McD reported by Bloomberg:

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ps. TWI is trade weighted index, a measure of the NZD against a basket of currencies relevant to the country (in trading terms)