RBNZ mentions possibility of rate cut

Thursday, 23 April 2015, 1:18 pm
Press Release: HiFX

RBNZ mentions possibility of rate cut

The Reserve Bank Assistant Governor John McDermott has just given a speech to the Waikato Chamber of Commerce.

His key points were:
• Monetary policy should remain stimulatory for a prolonged period
• Near-zero inflation New Zealand is seeing is mostly due to low tradables inflation
• Little monetary policy can do to influence inflation in near term
• Stimulating output growth above potential will help lift non-tradables inflation
• At present not considering any increase in interest rates
• Weaker demand, domestic inflation pressures could lead to an interest rate cut
• Rise in exchange rate while key export prices, such as dairy, have been falling, isunwelcome
• Confidence inflation will increase needed before rate hike
• There was no mention of new macro-prudential tools to control house price inflation.
NZD traded lower in immediate response.

Here’s the link to the full RBNZ press release on the speech:

http://www.rbnz.govt.nz/news/2015/near-zero-inflation-in-new-zealand.html

Current indicative levels are:

NZD-USD 0.7590 / 0.7615
NZD-AUD 0.9815 / 0.9840
NZD-EUR 0.7090 / 0.7115
NZD-GBP 0.5045 / 0.5070
NZD-JPY 91.10 / 91.35

ends

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