Highlights of the RBNZ decision on March 10, 2016:
- Just 2 of 17 analysts surveyed by Bloomberg expected a cut
- 4 expected a cut in the latest Reuters survey
Comments from RBNZ in Wheeler's statement:
- Further easing may be required
- Inflation is expected to move higher over 2016
- Policy will continue to be accommodative
- Further NZD depreciation is appropriate
- Sees 2016 Q1 annual inflation at 0.4% vs 1.2% prior
- Sees Q4 2016 annual inflation at 1.1% vs 1.6% prior
- Housing market pressures outside of Auckland a concern
- Outlook for global growth has deteriorated since Dec meeting
- GDP to year-end March 2017 +3.1% vs +2.9% prior
- Many risks around the outlook
- Full text of the RBNZ decision
Before the decision, most speculation was about how dovish the RBNZ would be. Some analysts were looking for overt hints about an imminent cut. Instead, the RBNZ shocked by cutting rates and the kiwi dropped more than a cent.
