RBNZ likely to leave the OCR unchanged - ANZ

Analysts at ANZ expect the RBNZ to leave the OCR unchanged at 1.75% at its Monetary Policy Statement next Thursday at 9am.

Key Quotes

“The RBNZ will reaffirm that the next move in the OCR could be up or down.”

“Since the August Monetary Policy Statement, Q2 GDP and Q3 CPI both surprised on the upside. This certainly gives the RBNZ a little more breathing room, but policy deliberations will remain focused on the balance of medium-term risks.”

“The RBNZ is likely to still conclude that a marked acceleration in GDP growth is required from here to ensure medium-term inflation heads sustainably back to target.”

“On balance, we therefore expect to see a flatter OCR track than in the August Statement, with eventual OCR increases pushed out a little further. It is also possible that the RBNZ simply go to a flat track, underscoring their rhetoric that the next OCR move could be up or down.”

“A Statement in line with our expectations could come as a surprise to markets.”

“We currently see the OCR on hold for the foreseeable future. It will be difficult for the economy to accelerate and to sustain stronger inflation over the medium term.”

“We see risks being tilted towards the next OCR move being a cut, but we are mindful of risks on both sides of the ledger.”