RBNZ 50bp rate hike, as expected. Takes the Official Cash Rate (OCR) to 2.5%

The Reserve Bank of New Zealand has raised their official cash rate from 2.0% to 2.5%, a widely expected move today.

Brief highlights from the announcement, RBNZ sees the path it outlined in May as still appropriate:

• The Committee agreed it remains appropriate to continue to tighten monetary conditions
• The Committee agreed to continue to lift the OCR to a level where it is confident consumer price inflation will settle within the target range.
• The Committee is comfortable that the projected path of the OCR outlined in the recent May Monetary Policy Statement remains broadly consistent with achieving its primary inflation and employment objectives - without causing unnecessary instability in output, interest rates and the exchange rate. Once aggregate supply and demand are more in balance, the OCR can then return to a lower, more neutral, level.

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Background to this:

• Reserve Bank of New Zealand rate hike decision coming today, +50bp the consensus estimate

• Economic calendar in Asia - Chinese trade data and the RBNZ interest rate announcement

• ANZ now forecast the RBNZ will hike 50bps in both July and August (previously 50 then 25)
• Poll shows the consensus for a 50bp interest rate hike from the RBNZ next week
• "Preview": Reserve Bank of New Zealand expected to raise its official cash rate 50bps
• Risk for NZD NZDThe New Zealand Dollar (NZD) is the official currency of New Zealand and th...Read this Term at today's RBNZ meeting is lowering of the OCR peak - Credit Agricole