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HiFX Data Update: RBNZ OCR remains at 1.75%

HiFX Data Update: RBNZ OCR remains at 1.75%

The RBNZ have maintained the Official Cash Rate (OCR) at 1.75%. This was widely expected.

The key points in the RBNZ statement and full monetary policy statement are:
Reserve Bank of NZ Keeps Cash Rate Unchanged at 1.75%

Keeping Official Cash Rate (OCR) at current level is best contribution to maximising sustainable employment and low and stable inflation

Expects to keep the OCR at this expansionary level for a considerable period of time

Positioned to manage rates up or down

CPI inflation is likely to increase in near term due to higher fuel prices
Beyond that, inflation expected to gradually rise to 2% target, resulting from capacity pressures

Weaker GDP implies marginally more spare capacity in economy than we anticipated
Spending, investment by both households and government likely to support growth
Government's projected spending impulse is slightly lower and later than anticipated

Global inflationary pressure is expected to be higher but remain modest
Global economic growth likely to support demand for NZ products and services
Global growth, inflationary outlook have been tempered slightly by trade tensions in some major economies

Ongoing volatility in some emerging market economies continues
The NZD dipped slightly in immediate response, but has since pushed a little higher.

The NZD was not mentioned in this release, although the RBNZ did state in recent days that the NZD at elevated levels.

The next OCR decision, full Monetary Policy Statement and press conference will be held on 9th August 2018.

Below is link to the full RBNZ press statement:

Current indicative levels are:

NZD-USD 0.6795 / 036820
NZD-AUD 0.9250 / 0.9275
NZD-EUR 0.5875 / 0.5900
NZD-GBP 0.5175 / 0.5200
NZD-JPY 74.90 / 75.15

There is no other NZ data scheduled this week. US GDP figures hit the tapes overnight.


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