17 Jun 2014
RBNZ fails to hint pause of tightening in July - RBS
FXStreet (Bali) - The RBNZ continues in its process to ‘normalise’ the OCR, notes Kymberly Martin, Senior Market Strategist at BNZ, expecting the OCR at 5.0%, at least, by 2016.
Key Quotes
"The RBNZ raised the Official Cash Rate (OCR) by 0.25% at its 12 June meeting, to 3.25%. It remained committed to the process of ‘normalising’ the OCR, from historic lows, as quickly as practical. The Bank’s published 90-day bank bill track was almost identical to the March MPS, still suggesting an OCR at 5.00% by late-2016. It expects inflationary pressures to increase and is therefore acting pre-emptively to keep average future inflation near its 2% target mid-point."
"The RBNZ again referenced considerable momentum in NZ economic growth. Canterbury reconstruction and strong net immigration flows were singled out as key contributors. Although NZ commodity prices remain historically high, the RBNZ noted their recent declines."
"The RBNZ repeated its mantra that the NZD at current levels was “unsustainable”. However, notable by its absence was any direct reference to adjusting the OCR track due to moves in the currency. There was also no hint of a pause at the next RBNZ meeting on 24 July."
Key Quotes
"The RBNZ raised the Official Cash Rate (OCR) by 0.25% at its 12 June meeting, to 3.25%. It remained committed to the process of ‘normalising’ the OCR, from historic lows, as quickly as practical. The Bank’s published 90-day bank bill track was almost identical to the March MPS, still suggesting an OCR at 5.00% by late-2016. It expects inflationary pressures to increase and is therefore acting pre-emptively to keep average future inflation near its 2% target mid-point."
"The RBNZ again referenced considerable momentum in NZ economic growth. Canterbury reconstruction and strong net immigration flows were singled out as key contributors. Although NZ commodity prices remain historically high, the RBNZ noted their recent declines."
"The RBNZ repeated its mantra that the NZD at current levels was “unsustainable”. However, notable by its absence was any direct reference to adjusting the OCR track due to moves in the currency. There was also no hint of a pause at the next RBNZ meeting on 24 July."