More from the RBNZ - economic outlook still highly uncertain

Author: Eamonn Sheridan | Category: Central Banks

The monetary policy post from the Reserve Bank of New Zealand is here:

And a note on the NZD imp[act so far:
Just a few more of the notable comments from the RBNZ (via their statement and minutes, the link to the full things are in that first post above):

RBNZ says the funding for lending programme (FLP)  unchanged

  • says economic activity in New Zealand slowed over the summer months
  •  says planned trans-Tasman travel arrangements should support incomes and employment (i.e. this is 'travel bubble' with Australia) 
  • says medium-term inflation and employment would likely remain below its remit targets in the absence of prolonged monetary stimulus.
  • says extent of the dampening effect of the government's new housing policies on house price growth will take time to be observed
  • outlook remains highly uncertain
  • reduced government bond issuance was placing less upward pressure on new Zealand government bond yields and providing less scope for LSAP purchases
  • business credit growth and investment remains subdued
  • government's new housing policies are likely to dampen house price growth
  • committee judged the medium-term outlook for growth as broadly similar to the scenario presented in the February .
  • increase in bank lending rates would be premature given the current economic outlook
  •  committee noted evidence that near-term price increases are likely
  • will see headline inflation exceed 2 percent for a period
  • impact on inflation from supply chain disruptions and oil price increases to be temporary.
  • the committee's initial assessment is that stimulatory monetary policy is playing a role in lifting house prices
  •  other factors are also influencing house prices



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