RBNZ: Annual Q3 Sectoral Factor Model Inflation falls to 5.2%

Dhwani Mehta FXStreet

The Reserve Bank of New Zealand (RBNZ) released its Sectoral Factor Model Inflation gauge for the third quarter of 2023 on Tuesday.

The inflation data arrived at 5.2% YoY in Q3 2023, dropping sharply from a 5.7% print recorded in Q2.

The official data published by the New Zealand Statistics (Stats NZ) early Tuesday, New Zealand’s Consumer Price Index (CPI) rose 5.6% YoY in Q3, much lower than the expected 5.9% increase in the reported period. In the second quarter, the country’s CPI rose 6.0%.

Both measures are closely watched by the RBNZ.

FX Implications

The Kiwi Dollar is under heavy selling pressure near 0.5900 after the release of the RBNZ inflation gauge. NZD/USD is trading 0.42% lower on the day at 0.5900, as of writing.

About the RBNZ Sectoral Factor Model Inflation

The Reserve Bank of New Zealand has a set of models that produce core inflation estimates. The sectoral factor model estimates a measure of core inflation based on co-movements - the extent to which individual price series move together. It takes a sectoral approach, estimating core inflation based on two sets of prices: prices of tradable items, which are either imported or exposed to international competition, and prices of non-tradable items, which are those produced domestically and not facing competition from imports.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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