RBNZ monetary policy meeting preview - BNZ says cash rate on hold

Author: Eamonn Sheridan | Category: Central Banks

The Reserve Bank of New Zealand  policy announcement is due June 26 at 0200GMT

Earlier previews:
Via BNZ (this in brief, bolding mine):
  • Immediately after May's Monetary Policy Statement (MPS) we highlighted that the Reserve Bank would be cutting rates again. At that time we noted that we were "ambivalent between August and November" with regard to timing. Given latest developments, and from our economic commentaries over recent weeks, it should be clear to all that our ambivalence has shifted in favour of August
Thus, no cut at this meeting. But, there is a but!
  • there is a solid risk the RBNZ is goaded into cutting its OCR a further 25 basis points, to 1.25%, this week
  • it will probably sound dovish enough, in its text, to leave the market largely pricing another 25bp cut at the August Monetary Policy Statement

Q1 GDP proved stronger than the Reserve Bank anticipated
  • However, Q1 GDP wasn't all that robust at heart
  • key domestic demand components of it were lagging
Q2 CPI is shaping up to be in line with the Bank's expectations
  • it remains to be seen whether spare capacity will open up in the economy, dampening (the rise in?) core inflation pressure

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