Initial analysis of the Reserve Bank of New Zealand policy announcement from Westpac in NZ

The RBNZ's Monetary Policy Statement this morning cut the OCR by 25bp to 2.50%, but gave mixed messages about any further easing (the press release said more easing is possible, the detail said they are firmly on hold). We interpret this as slightly hawkish for the market


  • detail in Statement confirmed the RBNZ expects to remain at 2.5%
  • The warning about the overvalued NZD exchange rate was re-introduced (after an omission in October):

"The New Zealand dollar has risen since August, partly reversing the depreciation that occurred from April. The rise in the exchange rate is unhelpful and further depreciation would be appropriate in order to support sustainable growth."