Reserve Bank of New Zealand official Cash Rate announcement, along with its latest Monetary Policy Statement
- Due at 9am New Zealand time on Thursday (This is 2000 GMT on 8 November 2017)
- There will be a press conference
Preview via Westpac, in broef and bolding mine:
- We expect no change to the OCR forecast, which in August was for the OCR to remain unchanged until 2019 and to rise very gradually thereafter
- We also expect the RBNZ to retain exactly the same policy guidance paragraph that it has used more-or-less unchanged since February this year: "Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly."
RBNZ needs to downgrade its GDP and house price forecasts to reflect
- construction sector ... stall
- GDP growth has been below expectations
- businesses' confidence in their trading outlook has fallen
- house price boom came to a halt
- consumer spending has flat lined since April
The exchange rate has fallen sharply and unexpectedly in recent weeks, mainly due to the election outcome
- This will provide some much-needed stimulus to the RBNZ's inflation forecast
- will allow the RBNZ to run with the same OCR forecast as previously
the election result has made the economic outlook so much more uncertain
- The new Government's housing policies will have a difficult-to-determine negative impact on house prices over 2018.
- The Government also plans to cancel next year's tax cuts, but to spend more over time.
- It won't be easy to anticipate the net impact on inflation until the exact policies are published.
At this stage, the Reserve Bank is better off waiting and seeing what happens with Government policy, rather than reacting prematurely to policy changes that may or may not eventuate.
