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