ASB currently have a forecast for a cash rate hike from the Reserve Bank of New Zealand in May of 2022.

But, say analysts at the bank, they are now "weighing the risk that the RBNZ opts to get off the mark even earlier".

ASB cite:

  • the NZ economy is increasingly at risk of overheating
  • supply side of the economy is clearly restrained by the closed border and disruptions to global supply chains and inventory levels
  • the strength of demand continues to outstrip even the most optimistic of forecasters
  • The associated lift in cost and inflation pressures is increasingly proving too worrisome for central banks to keep waving away as entirely temporary.

(Bolding mine). Are the RBNZ concerned about NZD strength ... no says ASB:

  • The fact the US Fed is shuffling forward and the NZ dollar remains remarkably restrained may leave the Bank more comfortable in doing so.
nzd/usd weekly candle chart June 2021

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Watch how similar developments may play out in countries other than NZ too.