RBNZ Governor Wheeler media conference post RBNZ OCR meeting

RBNZ Governor Wheeler media conference post RBNZ OCR meeting

The Reserve Bank Governor Graeme Wheeler has just held his post RBNZ OCR meeting media conference.

His key points are:
• Would like to see most of interest rate cut passed on by banks to customers
• Did not seriously consider 50 bps rate cut
• A larger rate cut was not justified
• Has built in 60 basis points of interest rate cuts into its projections
• Not surprised by rise in NZD$ after rate cut
• Will not comment on intervention in FX market
• Watching NZD reaction over next few days
• Would be concerned to see further falls in short term inflation expectations
• Has virtually no influence over tradables inflation
• Has very limited influence over the exchange rate
• If the interest rate differential widens we will see upward pressure on NZD
• Operating in phenomenon global circumstances due to many countries quantitative easing
• Expects to report to minister on debt to income ratio within next week or so
• Debt to income ratio tool unlikely to be implemented this year
• Has projections of cutting rates partly to take pressure off currency
RBNZ Governor Wheeler will testify on the Monetary Policy Statement before the Finance and Expenditure Select Committee from 1:10pm today.

Below is the link to the just released Monetary Policy Statement:

http://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Monetary%20policy%20statements/2016/mpsaug16.pdf

Current indicative levels are:

NZD-USD 0.7260 / 0.7295
NZD-AUD 0.9420 / 0.9445
NZD-EUR 0.6490 / 0.6515
NZD-GBP 0.5575 / 0.5600
NZD-JPY 73.50 / 73.75

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