RBNZ keeps rates unchanged at 1.75%


The Reserve Bank of New Zealand (RBNZ) said that it would leave the official cash rate unchanged at 1.75% in a decision that was widely expected, stating that monetary policy will remain accommodative for a considerable period. A press conference will be held by the RBNZ's governor Graeme Wheeler at 21:00 GMT.

Numerous uncertainties remain and policy may need to adjust accordingly.

Longer-term inflation expectations remain well anchored at around two percent.

Global growth continues to improve.

CPI inflation is projected to remain near the midpoint of the target range.

House price inflation has moderated, low house price inflation is expected to continue.

Impact of new government policies remain very uncertain.

NZ$ has eased and if sustained will increase inflation.

Employment growth has been strong.

A weaker outlook for housing, construction.

Key notes

RBNZ likely less concerned about currency headwinds - BNPP.

According to analysts at BNP Paribas, RBNZ is expected to remain on hold on Thursday as concerns about currency strength have likely reduced and sentiment towards the NZD remains bearish.

RBNZ needs to adopt a formal tightening bias - BNZ.

Stephen Toplis, Head of Research at BNZ suggests that it is their strong view that the RBNZ needs to adopt a formal tightening bias when it releases its November Monetary Policy Statement this Thursday.

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.

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