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RBNZ Sectoral Factor Inflation Model arrives at 3.1% YoY in Q4 2024

The Reserve Bank of New Zealand (RBNZ) published its Sectoral Factor Model Inflation gauge for the fourth quarter of 2024, following the release of the official Consumer Price Index (CPI) by the NZ Stats early Wednesday.

The inflation measure extends its downtrend to 3.1% year-over-year (YoY) in Q4 2024 vs. 3.4% in Q3.

The inflation measures are closely watched by the RBNZ, which has a monetary policy goal of achieving 1% to 3% inflation.

FX implications

The Kiwi Dollar sees a fresh selling wave after the RBNZ’s inflation data. At the time of writing, NZD/USD is down 0.44% on the day to hit intraday lows near 0.5650.

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 those 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

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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