State Street Market Commentary on RBNZ Rate Decision

State Street Market Commentary on The Reserve Bank of New Zealand Rate Decision

SYDNEY, 11 August, 2016 - In light of today’s interest rate decision from the The Reserve Bank of New Zealand, Dwyfor Evans, head of APAC macro strategy at State Street Global Markets, offers his views.

Dwyfor Evans: “The Reserve Bank of New Zealand (RBNZ) surprised markets in June by leaving interest rates unchanged. The potential for a repeat decision in August is weaker given the recent strengthening of the NZD amid signs of a persistent disinflationary backdrop to New Zealand prices (exacerbated by a stronger currency).

To that end, the combination of an intra-meeting “economic update”, acknowledgement that inflation has weakened since the June statement, and the recent Reserve Bank of Australia cash rate cut was sufficient to push the RBNZ towards another rate ease, and more will likely follow.”

ends

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