RBNZ keeps rates unchanged as expected
- Sees rate rising in 2Q 2020 vs 3Q 2020
- sees average OCR in 2Q 2020 at 1.81%
- sees average OCR in 3rd 2020 at 1.88%
- sees average OCR in 4Q 2020 at 1.96%
- sees official cash rate at 2.41% in December 2021
- Will keep OCR expansionary level for considerable.
- Brings forward forecast rate increased to 2Q 2020
- raises inflation forecasts
- there are both upside and downside risks to our growth and inflation projections
- upside risks to inflation outlook exist
- timing and direction of any future OCR moves remains data dependent
- higher fuel prices boosting headline inflation
- longer-term inflation expectations anchored at targets
- downside risks to growth remain
- employment is around max sustainable level
- ongoing trade tensions increasing risks to global growth
- CPI inflation remains below 2% midpoint, necessitating continued supportive monetary policy
- core CPI expected to gradually rise to 2% midpoint
- level of NZD will support export earnings
- GDP growth is expected to pick up over 2019
The full monetary statement can be found HERE