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RBNZ Governor Wheeler Speech
RBNZ Governor Wheeler Speech titled "The Global Economy, NZ Economic Outlook, & Policy Target Agreements"
The Reserve Bank Governor Graeme Wheeler has just delivered a speech titled“The Global Economy, NZ Economic Outlook, & the Policy Target Agreement” to the Canterbury Employers’ Chamber of Commerce.
His key points were:
• Most
risks facing the economy are on the
downside
•
• Will
take longer for headline inflation to reach
target
•
• RBNZ
will avoid a mechanistic response to low
inflation
•
• In
appropriate to cut rate in response to low
inflation
•
• More
to setting monetary policy than headline
inflation
•
• Future
easing may be required if concerns deepen about global
economy
•
• Some
further NZD depreciation is
desirable
•
• Monetary
policy will continue to be
accommodative
•
• Don’t
expect price expectations to drop
significantly
•
• Doesn’t
want inflation expectations to become unstable, decline
•
NZD is a
little higher in immediate response.
Quick summary: NZ interest rates will not be cut in response to falling oil, but they will if the global economy worsens, and the RBNZ would like the NZD lower.
Here’s the link to the full RBNZ press release on the speech:
http://www.rbnz.govt.nz/news/2016/canterbury-speech-on-pta.html
Current indicative levels
are:
NZD-USD 0.6525 /
0.6550
NZD-AUD 0.9290 /
0.9915
NZD-EUR 0.5975 /
0.6000
NZD-GBP 0.4530 /
0.4555
NZD-JPY 78.25. /
78.50
ends
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