Economists agree the risk of a New Zealand rate cut is real but most don’t actually expect it to happen.
The Reserve Bank has modelled a scenario in which it cuts the Official Cash Rate by 100 points if GDP growth stays below three percent over 2019.
Reserve Bank governor Adrian Orr kept the official cash rate at 1.75 percent as widely expected but said he now expects to keep rates on hold for at least a year longer than previously thought and reiterated the next move could be up or down.
Annual inflation continues to run low, suggesting there’s still some capacity in the economy that will help the Reserve Bank keep interest rates at record lows well into next year, writes Thomas Coughlan.
Reserve Bank governor Adrian Orr kept the benchmark interest rate on hold as widely expected but continued to leave the door open for a possible cut as downside risks increase.
The Reserve Bank will most likely keep the Official Cash Rate on hold at 1.75 percent, but the real question is whether it will signal keeping the rate on hold for longer after last week’s disappointing GDP numbers.
The Reserve Bank has left the official cash rate or OCR at 1.75 percent for the tenth consecutive decision. In a statement this morning the RBNZ said it expected the rate to stay at 1.75 percent for “some time to come”, with the risks of either cuts or increases evenly balanced.
Finance Minister Grant Robertson expects new Reserve Bank Governor Adrian Orr to review the bank's modelling that currently shows unemployment cannot go any lower without generating an inflation surge. Bernard Hickey reports.
In today's email we find a landmine for the incoming Reserve Bank governor to defuse.
The old guard still running the Reserve Bank are in no mood to cut interest rates, but new Governor Adrian Orr will face pressure from the Government and some economists to cut when he arrives in just over six weeks as inflation remains stubbornly at the bottom end of the bank's target band.