January 28 issue of the BNZ Weekly Overview
The week has been relatively quiet with regard to information on the New Zealand economy. Data have emerged showing both
households and businesses avoiding borrowing, while credit card spending fell away late last year. The highlight was
this morning’s review of the official cash rate by the RB – where nothing happened. The rate remains at 2.5% and is
likely to stay there until a series of rate rises start in June.
Offshore a bout of heebie geebies regarding the Chinese economy, Greece, Japan plus the US housing market has produced a
rise in risk aversion which has pushed the NZD to below US 71 cents. It is unlikely to stay there however as the year
brings rising NZ interest rates and commodity prices.
ENDS