Reserve Bank of New Zealand Monetary policy Statement and Governor Orr press conference

  • from 0200GMT

Earlier posted previews here:

Consensus expectations are, in summary:

  • RBNZ to leave its cash rate on hold at 0.25%
  • and to upgrade its economic forecasts

Reuters polling have all 12 surveyed analysts expecting the Bank to hold the OCR at its record low. Reuters add some comments via Kiwibank:

  • "No central bank wants to tighten policy prematurely"
  • "The difficult task for central banks over the last decade or more has been on how to generate sustainable inflation. Letting an economy run a little hot is justified."

And via WPAC in NZ:

  • "A 'neutral' unemployment rate is probably in the region of 4%; we'd need to get not just down to that level, but below it, before we would expect to see a substantial pickup in wage pressure,"
  • Westpac does not expect a rate hike from the RBNZ until early 2024, though it assumes other unconventional policies, including bond buying, will end before then.

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Background to the meeting, major economic indicatoions:

  • unemployment falling to 4.7% in the March quarter (two years ahead of RBNZ projections)
  • key commodity exports, notably dairy, have beaten price expectations
  • boom in the housing market a boost for the construction sector
  • inflation expected above 2% this year, but not to be sustained above there
Reserve Bank of New Zealand Monetary policy Statement and Governor Orr press conference