RBNZ Chief Economist: Expect to hold the OCR at current level until March 2021

Ross J Burland FXStreet

The Reserve Bank of New Zealand's Chief Economist Yuong Ha has said that they expect to hold the OCR at the current level until March 2021.

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Key comments

Banks to be the solution to the problem.
Banks are healthy.
We are talking about negative wholesales rates, not retail rates.
A negative OCR could evolve.

Meanwhile, the risk-on vibe is keeping the bird elevated as the greenback struggles to find reaction.

"There are as many reasons to be bullish (we have beaten COVID-19, commodity prices are holding up, risk appetite has bounded back quickly) as there are to be bearish (tourism was a big piece of the economy and it’s now gone, our yields are lower than the US and Australia’s, negative rates might be coming, risk sentiment could sour at any time), which makes the outlook tricky," analysts at ANZ Bank argued.

But for now, the market loves Kiwi and it looks set to stay that way for a while, especially while the mood is still good. 0.6170 beckons again.

Fonterra earnings: Now sees 2019-20 milk price of NZ$7.10-NZ$7.30/kg

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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