RBNZ 50bp rate hike, as expected. Takes the Official Cash Rate (OCR) to 2.5%

The Reserve Bank of New Zealand has raised their official cash rate from 2.0% to 2.5%, a widely expected move today.

Brief highlights from the announcement, RBNZ sees the path it outlined in May as still appropriate:

• The Committee agreed it remains appropriate to continue to tighten monetary conditions
• The Committee agreed to continue to lift the OCR to a level where it is confident consumer price inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term will settle within the target range.
• The Committee is comfortable that the projected path of the OCR outlined in the recent May Monetary Policy Statement remains broadly consistent with achieving its primary inflation and employment objectives - without causing unnecessary instability in output, interest rates and the exchange rate. Once aggregate supply and demand are more in balance, the OCR can then return to a lower, more neutral, level.

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Background to this:

• Reserve Bank of New Zealand rate hike decision coming today, +50bp the consensus estimate

• Economic calendar in Asia - Chinese trade data and the RBNZ interest rate announcement

• ANZ now forecast the RBNZ will hike 50bps in both July and August (previously 50 then 25)
• Poll shows the consensus for a 50bp interest rate hike from the RBNZ next week
• "Preview": Reserve Bank of New Zealand expected to raise its official cash rate 50bps
• Risk for NZD NZDThe New Zealand Dollar (NZD) is the official currency of New Zealand and th...Read this Term at today's RBNZ meeting is lowering of the OCR peak - Credit Agricole