RBNZ's McDermott - Bank could change language if NZD appreciates in TWI terms

RBNZ Assistant Governor McDermott has warned that central bank could use different language if the NZD exchange rate appreciates on a trade-weighted index (TWI) basis. 

The RBNZ Governor Spencer took note of the rise in the nominal exchange rate earlier today, and said, "we assume the trade-weighted exchange rate will ease over the projection period.”

McDermott comments (via Reuters)

• Comfortable with TWI moves, not enough to move us from current strategy
• If TWI kept moving up and was following trend, think RBNZ would start using different language
• Weakness against USD not what we anticipated; question is will it last
• Little change in view on inflation for last few quarters
• Core inflation still needs a little shove to get it towards midpoint of target range
• Non-tradeable inflation, inflation expectations key influences on OCR track
• Range of risks to outlook mean equal probability next move could be cut
• GDP revisions suggest speed limit for economy moved up to near 3 pct before inflation generated
• Equity market volatility considered at meeting, not material at moment