NZ Official Cash Rate

We now expect the RBNZ to cut the OCR by 50bps to 4.75% at the October Monetary Policy Review. • We also expect another 50bps cut to 4.25% at the November Monetary Policy Statement. • The projected step up in the pace of easing in October is a more finely balanced decision (perhaps a 60% probability) whereas the probability of a larger easing in November looks much higher. • The inflation outlook now looks set to settle close to 2% from Q3 2024 and gives the RBNZ more room to move more quickly back to neutral settings. • We continue ...

Policymakers at the Reserve Bank of New Zealand have slashed half a percentage point from the official cash rate and claimed victory in achieving its inflation mandate. The seven person Monetary Policy Committee chose to cut the benchmark interest rate from 5.25% to 4.75% after meeting on Wednesday. In a statement, they said annual inflation was now within the target range and was "converging on the 2% midpoint". "The New Zealand economy is now in a position of excess capacity, encouraging price- and wage-setting to adjust to a ...

We now expect the RBNZ to cut the OCR by 50bps to 4.75% at the October Monetary Policy Review. • We also expect another 50bps cut to 4.25% at the November Monetary Policy Statement. • The projected step up in the pace of easing in October is a more finely balanced decision (perhaps a 60% probability) whereas the probability of a larger easing in November looks much higher. • The inflation outlook now looks set to settle close to 2% from Q3 2024 and gives the RBNZ more room to move more quickly back to neutral settings. • We continue ...

A snippet from UBS on Pacific Rim central banks: Fed’s easing cycle is just getting started, UBS see another 50 bp of cuts this year and 100 in 2025. Bank of Japan to raise short term rates by 25 basis points by the middle of 2025. See the most aggressive easing moves from the Reserve Bank of New Zealand, 200 basis points of cuts by September 2025. Reserve Bank of Australia is likely to wait until Q1/Q2 before starting its easing cycle, expect 75 basis points of easing by September 2025. AUD is UBS' 'most preferred', it'll benefit ...

There are clear signs of a continued weakening in economic activity as households and businesses hunker down in response to the interest rate increases to date. Households have reduced their discretionary spending in the face of higher mortgage repayments and more uncertain employment prospects. Weaker demand, in turn, has made businesses more cautious about spending and investment. The impact of higher interest rates and public sector cutbacks has become more evident in recent months. Weaker demand has increasingly become a key ...

Expectations are building that the Reserve Bank will cut the official cash rate on Wednesday for the first time in more than four years. Wholesale interest rates have been falling in recent weeks as financial markets expect the first cut to the official cash rate since March 2020. The Reserve Bank started increasing the cash rate in late 2021 in response to high inflation, with the OCR reaching its current peak of 5.5 percent in May last year. However, in recent months, economic data shows inflation slowing, unemployment rising and ...