Decision as expected.
Comments from the RBNZ
- policy will remain accommodative for considerable period
- maintains forecast for rates to rise in second-quarter 2019
- numerous uncertainties remain, policy may need to adjust
- assumes trade weighted FX rate will ease
- sees inflation reaching 2% in 3rd quarter 2020 versus 2nd quarter 2018
- says FX rate has firmed since November statement
- cuts 1st quarter 2008 growth forecast to 0.8% from 1.2%
- NZD move in large part due to US dollar move
- CPI forecast to trend upwards toward midpoint of target.
- says domestic economic growth is projected to strengthen
- house prices inflation has increased somewhat but housing credit growth continues to moderate
- labor market conditions continue to tighten
- has revised down the impact of new government policies and near-term
The NZDUSD has moved to new session lows and the lowest level since January 11 on more dovish statement. The 38.2% of the move up from the November low at 0.71835 is the next major target. The low on the initial selloff took the price down to 0.7208.
RBNZs Spencer will hold a news conference at 2100 GMT/4 PM ET.
