XE Data Update - RBNZ Official Cash Rate decision

XE Data Update - RBNZ Official Cash Rate decision - OCR unchanged, NZD higher

The RBNZ have held the Official Cash Rate (OCR) constant at 1.00% - this surprised the market, who were expecting a rate cut. NZD has rocketed higher across the board.

The key points in the RBNZ statement are:
• The committee agreed that economic developments since the August had been offsetting for the monetary policy outlook
• Noted that the risks to the economy in the near term were tilted to the downside
• Agreed it would add further monetary stimulus if economic developments warranted
• Debated the costs and benefits of keeping the OCR at 1.0% versus reducing it to 0.75%
• Agreed that both actions were broadly consistent with the current OCR projection
• Agreed reduction in the OCR over the past year was transmitting through the economy and would take time to have full effect
• Noted the bank’s work programme assessing alternative monetary policy tools in the New Zealand environment
• Noted that business surveys suggest weak growth has continued over the second half of 2019
• Agreed that accommodative monetary policy remains necessary to continue to meet their inflation and employment objectives
The NZD is higher in immediate response.

The next OCR decision, along with a full Monetary Policy Statement, will be held on the 12th February 2020.

Below is link to the RBNZ press release:

https://www.rbnz.govt.nz/news/2019/11/official-cash-rate-unchanged-at-1-percent

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