New Zealand Monetary Policy June 2018

New Zealand

New Zealand: RBNZ keeps key rate on hold in June

June 28, 2018

At its 28 June meeting, the Reserve Bank of New Zealand (RBNZ) met market analysts’ expectations and kept the Official Cash Rate (OCR) unchanged at a record-low 1.75%, where it has been since November 2016. This was the second monetary policy meeting incorporating the broadened mandate of supporting maximum sustainable employment and achieving price stability.

The RBNZ’s decision was taken against a backdrop of weaker-than-expected growth at the outset of the year, with the economy losing steam in Q1 from the previous quarter. The Bank also cited the escalation of global trade tensions and lowered its expectations of the stimulatory effect from the upcoming government spending push, suggesting a less bullish take on its economic outlook. On the price front, the RBNZ noted inflation remains low but is set to increase in the near term, largely due to external factors, namely higher oil prices. All in all, soft economic data and weak inflationary pressures likely served as the rationale behind the Bank’s decision.

Looking ahead, the RBNZ highlighted that the OCR is expected to remain low but gave no clear guidance of future policy moves, stressing only that it is “well positioned to manage change in either direction—up or down—as necessary”. Given the communique’s dovish tone, it is likely that monetary policy will remain accommodative for some time to come.

FocusEconomics panelists expect that the OCR will end 2018 at 1.75%. They see it increasing further and ending 2019 at 2.23%.


Author:, Economist

Sample Report

Looking for forecasts related to Monetary Policy in New Zealand? Download a sample report now.

Download

New Zealand Monetary Policy Chart


NewZealand Monetary Policy June 2018

Note: Official Cash Rate (OCR) in %.
Source: Reserve Bank of New Zealand (RBNZ).


New Zealand Economic News

  • New Zealand: RBNZ on hold in February

    February 12, 2020

    On 12 February, the Reserve Bank of New Zealand (RBNZ) kept the official cash rate (OCR) unchanged.

    Read more

  • New Zealand: Unemployment rate unexpectedly dips in Q4

    February 5, 2020

    The seasonally-adjusted unemployment rate slip to 4.0% in Q4 from a revised 4.1% the previous quarter (previously reported: 4.2%).

    Read more

  • New Zealand: Consumers start 2020 on a positive note

    February 5, 2020

    The ANZ-Roy Morgan consumer confidence indicator dipped to 122.7 in January from December’s almost two-year high of 123.3, remaining comfortably above the 100-threshold that separates optimism from pessimism among consumers. Consumers had a worse assessment about their current financial situation compared to one year ago and their five-year general economic outlook was somewhat less upbeat.

    Read more

  • New Zealand: Inflation accelerates in Q4

    January 24, 2020

    Consumer prices increased 0.5% in Q4 2019 over the previous quarter, down slightly from Q3’s 0.7% rise but beating analysts’ expectations of a 0.4% increase, according to Statistics New Zealand.

    Read more

  • New Zealand: Consumers close 2019 on a high note

    December 20, 2019

    The ANZ-Roy Morgan consumer confidence indicator rose to 123.3 in December (November: 120.7), moving further above the 100-threshold that separates optimism from pessimism among consumers and printing the best result since March 2018. Consumers grew more optimistic about their future personal finances and they had better assessments about their current financial situation compared to one year ago.

    Read more

More news

Search form