Comments from Reserve Bank of New Zealand Governor Wheeler

  • Most risks facing the economy are on downside
  • To take longer for headline inflation to reach target
  • Fixation on headline inflation would be inappropriate
  • RBNZ may ease further if global outlook worsens
  • Inappropriate to cut rate in response to low oil price
  • Don't want price expectations to drop significantly
  • Some further exchange rate depreciation is desirable
  • RBNZ will avoid mechanistic response to low inflation
  • Encouraging that inflation expectations average 2%
  • RBNZ monetary policy will continue to be accommodative

Despite Wheelers kick at the NZD its just sittin' there, stone faced.

His comments on the RBNZ response (or lack of) to low inflation are informative. They are looking beyond the impact of oil prices.

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He's the RBNZ's big wheel (I'll get my coat)

Go tiger!