Reserve Bank of New Zealand announcement, along with the Monetary Policy Statement (MPS)

OCR left at 1.75%, unchanged

  • Says monetary policy will remain accommodative for a considerable period
  • Says a lower NZD is needed
  • says numerous uncertainties remain and policy may need to adjust accordingly
  • Says longer-term inflation expectations remain well-anchored at around 2 percent
  • Says expects future headline inflation to reach the midpoint of the target band over medium-term
  • Non-tradeables inflation expected to increase gradually as capacity pressure increases
  • Outlook for tradeables inflaiton remains weak
  • Headline inflation is likely to decline in coming quarters
  • Says global growth has increased, more broad based
  • Says domestic economic growth is expected to improve
  • Says house price inflation continues to moderate
  • NZD has risen partly in response to weaker us dollar

Sees official cash rate at 1.8 pct in December 2017

  • Sees official cash rate at 1.8 pct in December 2018
  • Sees official cash rate at 1.9 pct in December 2019
  • Sees official cash rate at 2.1 in September 2020
  • Sees TWI around 76.8 in December 2018
  • Sees annual CPI inflation at 1.9 pct in December 2018

Quick headlines via Reuters

Here is the link to the bank's latest quarterly Monetary Policy Statement for August 2017

Correct me if I'm wrong but the Bank's forecast track for the OCR is unchanged .... first hike still in September 2020.

In fact, minimal changes to forecasts across the Statement.

Net, the Reserve Bank of New Zealand is less dovish than was generally expected in their Statement. Which has tended to give a bit of support to the NZD. The bank specifically said a lower NZD is needed - market not caring about that comment. Maybe Wheeler will be more forthright in comments at his press conference coming up (2200GMT).


Still to come from the RBNZ:

  • Governor Wheeler news conference at 2200GMT (there will be a live stream here)
  • And, at 0110GMT Governor Wheeler speaks in parliament (committee)