Breaking: RBNZ leaves rates unchanged at 1.00%. disappoints the doves – Kiwi rallies hard


At its November monetary policy meeting on Wednesday, New Zealand’s central bank, the Reserve Bank of New Zealand (RBNZ), left its Official Cash Rate (OCR) unchanged at a historic low of 1.00%, following a bigger-than-expected cut announced in August.

The Kiwi rallied over 80-pips to regain the 0.64 handle on the unexpected rates on-hold decision by the RBNZ. 

Statement Summary

Employment around its max sustainable level, inflation within target range.

Economic developments do not warrant a change to already stimulatory monetary setting at this time.

Expects economic growth to remain subdued for rest of year.

We remain prepared to act as required.

We will continue to monitor economic developments.

Minutes of the meetings

Committee agreed that economic developments since the August had been offsetting for the monetary policy outlook.

Committee noted that the risks to the economy in the near term were tilted to the downside.

Committee agreed it would add further monetary stimulus if economic developments warranted.

Committee debated the costs and benefits of keeping the OCR at 1.0 percent versus reducing it to 0.75 percent.

Committee agreed that both actions were broadly consistent with the current OCR projection

Committee agreed reduction in the OCR over the past year was transmitting through the economy and would take time to have full effect.

committee noted the bank’s work programme assessing alternative monetary policy tools in the New Zealand environment.

Committee noted that business surveys suggest weak growth has continued over the second all of 2019.

Committee agreed that accommodative monetary policy remains necessary to continue to meet their inflation and employment objectives.

About RBNZ Interest Rate Decision

RBNZ Interest Rate Decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the NZD.

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