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XE Data Update - RBNZ Official Cash Rate decision

The RBNZ have held the Official Cash Rate (OCR) steady at 1.50% - this was widely expected.

The key points in the RBNZ statement and full monetary policy statement are:
Committee discussed the merits of lowering the OCR at this meeting

Reached a consensus to hold the OCR at 1.5%, noted a lower OCR may be needed over time


Discussed the subdued nominal wage growth in the private sector
Discussed whether additional monetary stimulus was necessary given continued falls in global growth and subdued domestic demand

Agreed that more support from monetary policy was likely to be necessary.

Noted two largely offsetting developments affecting the outlook for domestic growth: softer house price inflation and additional fiscal stimulus

Relative to the May statement, risks to achieving CPI and sustainable employment objectives are tilted to the downside

Noted that recent softer house prices, if sustained, are likely to dampen household spending

Global economic conditions had deteriorated, committee noted Q1 domestic GDP held up better than expected

The NZD dipped lower in immediate response before bouncing higher.

The next OCR decision will be held on the 7th August. The market expects the RBNZ will lower the OCR by 0.25% at this meeting. The US Fed and RBA are also expected to lower their interest rates in the on 1st and 6th August respectively.


Current indicative levels are:

NZD-USD 0.6640 / 0.6665
NZD-AUD 0.9540 / 0.9565
NZD-EUR 0.5845 / 0.5870
NZD-GBP 0.5230 / 0.5255
NZD-JPY 71.30 / 71.55

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