Data Flash (New Zealand)
NZ: RBNZ May Monetary Policy Statement
Cash Rate April Review DB Expectations for May MPS Actual May MPS 6.00% 5.75% 5.75%
Monetary Conditions RBNZ
March MPS DB Expectations for May MPS Actual May MPS
90d % TWI 90d % TWI 90d % TWI
H1 2001 6Ÿ 50Ÿ 6 49Ÿ 6 49Ÿ
H2 2001 6Ÿ 51Ÿ 6 50Ÿ 6 50Ÿ
H1 2002 6Ÿ 52Ÿ 6 51Ÿ 5Ÿ 51
H2 2002 6Ÿ 53Ÿ 6 52Ÿ 5Ÿ 52
H1 2003 6Ÿ 54 6Ÿ 53 6 52Ÿ
H2 2003 6Ÿ 54Ÿ 6Ÿ 53Ÿ 6 53Ÿ
Economic Forecasts RBNZ
March MPS DB Expectations for May MPS Actual
May MPS
GDP (Mar yrs, aa%)
2001 2Ÿ 2Ÿ 2Ÿ
2002 3Ÿ 2Ÿ 3
2003 3Ÿ 3Ÿ 3
CPI (qoq%)
Jun qtr 2001 0.6 0.7 0.9
Sep qtr 2001 n/a 0.5 0.6
CPI (yoy%)
March 2001 3.2 3.2 3.1
March 2002 1.4 2.0 2.5
March 2003 1.3 1.4 1.5
RBNZ eased by 25 bps, with the tone of the statement relatively neutral. If economy turns out as in RBNZ central
projections, then it looks as if RBNZ is done with the easing cycle.
The Bank is still quite optimistic on growth and has revised up inflation forecasts by a full percentage point over the
next year.
However, due to global risks, overall risk to RBNZ forecasts may be skewed slightly to the downside.
If there is an easing bias, we consider it very small - of course the RBNZ would not rule out cutting rates further if
the global outlook deteriorates. However, they also present tightening scenarios in the MPS, suggesting that they do not
want the market to price in too much in terms of further rate reductions.
Ends