Data dependent RBNZ leaves Official Cash Rate (OCR) at 1.75%

The RBNZ has left the Official Cash Rate (OCR) at 1.75% and says expects to keep the OCR at this level through 2019 and into 2020.
RBNZ says there are both upside and downside risks to our growth and inflation projections.

  • Expects to keep the OCR at this level through 2019 and into 2020.
  • There are both upside and downside risks to our growth and inflation projections.
  • Timing and direction of any future OCR move remain data dependent.
  • Pick up in GDP growth in Q2 was party due to temporary factors, biz survey continues to suggest growth will be soft in near term.
  • Says employment is around max sustainable level.
  • Says level of New Zealand dollar will support export earnings.
  • Says CPI inflation remains below 2 pct midpoint, necessitating continued supportive monetary policy.
  • Says GDP growth is expected to pick up over 2019.

For today's meeting, analysts at TD Securities outlined some key comments and potential tweaks to look out for in this statement: 

Checklist for the Monetary Policy Statement:

  • REPEAT: “The direction of our next OCR move could be up or down.” Removing this will be too hawkish too soon and NZD and swap rates will jump beyond comfort levels for the RBNZ.
  • REPEAT: “intends to keep the OCR at an expansionary level for a considerable period.” Should drop the reference to "and into 2020" given the string of upside surprises to growth, labour market strength and inflation.
  • TWEAK: OCR increase brought forward by six months to reflect the higher inflation profile. Not doing so erodes RBNZ credibility.
  • REPEAT: From the September OCR Review, where core inflation and GDP were stronger than expected but "downside risks remain". DROP: the August downside growth scenario where the OCR could be cut by up to -100bp if growth disappoints. Growth has not only not disappointed but Q3 looks like another strong print (our tracking is for another +1.2%/q for GDP(E)).
  • REPEAT: the upside inflation scenario where the OCR could be +50bp higher than the base case.

About the RBNZ interest decision and statement

The 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 raises the interest rates it is positive, or bullish, for the NZD. The RBNZ rate statement contains the explanations of their decision on interest rates and commentary about the economic conditions that influenced their decision.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD: traders set to position ahead of Fed

The EUR/USD pair moderated its advance on Friday, compliments to stronger-than-expected US data, finishing the week anyway with gains around 1.1070. Better-than-expected US data released Friday brought relief to USD bulls.


GBP/USD: Brexit optimism keeps bulls in the drivers’ seat

The GBP/USD pair has advanced for a second consecutive week, reaching Friday 1.2505, its highest since last July, and settling not far below this last. Fading odds for a hard-Brexit continue to underpin the Pound.


USD/JPY: further gains depending on risk-related sentiment

The USD/JPY pair settled above the 108.00 level for the first time since late July, closing substantially higher for a third consecutive week.  Demand for the safe-haven yen continued to be undermined.


Gold: Down for third straight week, on the defensive ahead of the Fed

Gold is set to end lower for the third straight week and will likely remain on the defensive in the run-up to Wednesday's Federal Open Market Committee (FOMC) meeting. A dovish surprise will likely put a strong bid under the yellow metal.

Gold News

The good, the bad and the extremely ugly crypto

XRP is in a borderline situation and with little room for doubt. Bitcoin demonstrates its power and positions itself as the emerging leader. Ethereum is in an intermediate situation, far from risk but also from opportunity.

Read more