The Shadow Board overwhelmingly calls for a tightening in monetary policy at the August Monetary Policy Statement, with many noting an OCR increase would be appropriate.
That said, there remained a wide range of views amongst the Shadow Board, the press release states.
''Recent developments point to a rise in inflation pressures in the New Zealand economy, reflecting the combination of strengthening demand and COVID-related supply constraints.''
''Some Shadow Board members also highlighted the strength of the New Zealand labour market, which fulfils the other target the Reserve Bank has in achieving full employment. However, the risk of the COVID Delta strain making its way into the New Zealand community and the containment measures that come with it is a cause for caution for Shadow Board members in determining the appropriate pace and extent of tightening over the coming year.''
Meanwhile, NZD/USD is bid following the weakness in the US dollar of Friday after a survey showed US consumer sentiment dropped sharply in early August to its lowest level in a decade.
The fall was one of the six largest drops in the past 50 years of the survey, stripping the US dollar of its better bid status on the forex board.
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