HiFX Data Update - RBNZ - No Change to Official Cash Rate

HiFX Data Update - RBNZ - No Change to Official Cash Rate

The RBNZ have maintained the Official Cash Rate (OCR) at 2.75% - this was largely expected.

The key points in the RBNZ statement are:
• RBNZ maintains the official cash rate at 2.75%
• Says further easing seems likely – depends on data
• Rates appropriate at present and best to watch and wait
• A sustained raise in the NZD would require an even lower interest rate path
• Concerns remain on China & east Asia growth prospects
• Markets uncertain about US Fed tightening, easing else where
• Rise in dairy prices helping business, consumer sentiment
• Too early to say if dairy improvements to be sustained
• House price inflation in Auckland remains strong
• Growth in services remain robust
The NZD traded in both directions in response, but has ended up a little higher (although the NZD was sold off aggressively earlier this morning after the US Fed monetary policy announcement).

The next OCR decision will be held on 10th December. We believe it is ‘odds-on’ the RBNZ will cut rates by 0.25% at this meeting.

Below is link to the full RBNZ statement:

http://www.rbnz.govt.nz/monetary_policy/ocr/

Current indicative levels are:

NZD-USD 0.6655 / 0.6680
NZD-AUD 0.9395 / 0.9420
NZD-EUR 0.6100 / 0.6125
NZD-GBP 0.4365 / 0.4390
NZD-JPY 80.70 / 80.95

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