Highlights of the Reserve Bank of New Zealand interest rate decision

  • Prior was 1.75%
  • All economists polled by Bloomberg expected no change

Statement:

  • Policy will remain accommodative for a considerable period
  • Numerous uncertainties remain, policy may need to adjust
  • Low house price inflation expected to continue
  • Cuts Q4 growth forecast to +0.9% from +1.0%
  • CPI projected to remain at midpoint of target range
  • Impact of new government policies remains 'very uncertain'

Rates forecasts:

  • Sees average OCR in Q1 2019 at 1.8%
  • Sees average OCR in Q4 at 1.9%
  • Now forecasts rates rising in Q2 2019 vs Q3 previously

The bolded is behind the initial jump in NZD/USD to 0.6955 from 0.6925.

Grant Spencer is the interim Governor until March 26 after Wheeler's retirement last month.

This is the final meeting of 2017. The next one isn't until February. The new government plans to change the RBNZ's mandate and decision-making structure.