Coming up in NZ this week - the Reserve Bank of New Zealand meet on Wednesday 23 November 2022 (NZ time).


In brief comments from ASB:

  • we and many other forecasters are predicting that the RBNZ will lift the OCR by 75bp on Wednesday, which would be a step up in pace after five consecutive 50bp moves. It is by no means a done deal, which is reflected in interest rate pricing that puts the odds of a 75bp move (vs. 50bp) at around 60%.
  • Why such a big move, after a string of already-large hikes and so late in the tightening cycle? ... the rationale is that current inflation is much too high and shows signs of being more embedded than ourselves and the RBNZ had earlier thought.
  • Surveyed inflation expectations have jumped, even as headline inflation itself looks to have peaked and petrol prices have fallen considerably. That means a growing risk of behavioural changes that ingrain inflation and make the RBNZ’s job of getting inflation down that much harder.
rbnz Wednesday, 23 November 2022