IMF: RBNZ's current monetary policy stance fits subdued inflation conditions
|The International Monetary Fund (IMF) came up with its own analysis of New Zealand’s economic conditions and monetary policy ahead of the monetary policy meeting by the Reserve Bank of New Zealand (RBNZ).
The global lender holds neutral stand for the Kiwi economy and favors the current monetary policy fitting subdued inflation conditions.
Key points:
- Downside risks to New Zealand's growth outlook have increased but it has policy space to respond should risks materialize.
- The economic expansion is solid, but lost momentum recently.
- RBNZ’s current monetary policy stance fits subdued inflation conditions.
- NZD still a bit above long term average.
- NZD level not an immediate concern.
FX implications:
Given the major market focus surrounding the RBNZ during early Asian session, comments from the global institute concerning the Kiwi economy and monetary policy gives further direction to the traders towards a neutral rate statement and a less harm to the New Zealand Dollar (NZD) going forward.
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