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1 Aug 2014
RBNZ to resume hiking cycle around year-end - BNZ
FXStreet (Bali) - According to BNZ Economists, after the RBNZ raised the OCR by 0.25% to 3.50%, it will now pause, but is expected to resume its hiking cycle around year-end.
Key Quotes
"RBNZ's tightening bias remains firmly in place. It sees strong growth, with net immigration trends and construction activity being key contributors. While current inflation remains contained it sees forward indicators rising. It would like to see the OCR back toward “more-neutral” levels before too long."
"When the RBNZ decides to resume its hiking process will be dependent on future economic and financial data, and the implications these have for inflation. One of the financial indicators the RBNZ will be tracking closely will be the NZD."
"The RBNZ could not have been more explicit in its view on the currency in its most recent statement. It said; “the level of the New Zealand dollar is unjustified and unsustainable and there is potential for a significant fall”.
"A fall will be welcomed by money but it will also add to inflationary pressures due toa rise in imported goods costs and the domestic price of the goods New Zealand exports."
Key Quotes
"RBNZ's tightening bias remains firmly in place. It sees strong growth, with net immigration trends and construction activity being key contributors. While current inflation remains contained it sees forward indicators rising. It would like to see the OCR back toward “more-neutral” levels before too long."
"When the RBNZ decides to resume its hiking process will be dependent on future economic and financial data, and the implications these have for inflation. One of the financial indicators the RBNZ will be tracking closely will be the NZD."
"The RBNZ could not have been more explicit in its view on the currency in its most recent statement. It said; “the level of the New Zealand dollar is unjustified and unsustainable and there is potential for a significant fall”.
"A fall will be welcomed by money but it will also add to inflationary pressures due toa rise in imported goods costs and the domestic price of the goods New Zealand exports."