RBNZ: Stays on target – Westpac

Dominick Stephens, Chief Economist at Westpac, explains that as expected, the RBNZ left the OCR unchanged and repeated its neutral guidance for the OCR outlook.

Key Quotes

“RBNZ’s thinking has become more dovish, with a downgrade to the inflation outlook.”

“The RBNZ still expects to keep the OCR unchanged until around mid-2019, before gradually lifting interest rates.”

“The RBNZ’s GDP forecasts still look too optimistic to us. We expect the recent plunge in business confidence combined with a housing market slowdown will lead to slower GDP growth in 2018 than the RBNZ expects.”

“Consequently, we think the risks are tilted towards later OCR hikes than the RBNZ is currently planning.”