Reserve Bank of New Zealand
- Demand growth in the economy continues to ease.
- Committee agreed
that the OCR needs to stay at a restrictive level - Interest rates are
constraining economic activity and reducing inflationary pressure
as required - While GDP growth in
the June quarter was stronger than anticipated, the growth outlook
remains subdued. - With monetary
conditions remaining restrictive, spending growth is expected to
decline further - Near-term risk that
activity and inflation do not slow as much as needed - Prolonged period of
subdued activity is required to reduce inflationary pressure
RBNZ minutes:
- Committee agreed
that interest rates may need to remain at a restrictive level for a
more sustained period of time - Committee noted
inflation is still expected to decline to within the target band by
the second half of 2024 - Committee noted
inflation is still expected to decline to within the target band by
the second half of 2024 - Recent indicators
show that employment intentions are flat and difficulty in finding
labour has reduced - Over the medium term
committee agreed downside risks around the outlook for global growth
remain
—
Background to this decision:
- RBNZ policy decision due today – surprise tightening to 5.75% is a risk (but a small one)
- Previewing the RBNZ policy decision due today – rate hike ahead of election is unlikely
This article was written by Eamonn Sheridan at www.forexlive.com. Source