New Zealand Monetary Policy June 2019

New Zealand

New Zealand: RBNZ stands pat in June

June 26, 2019

On 26 June, the Reserve Bank of New Zealand (RBNZ) left the official cash rate (OCR) unchanged at an all-time low of 1.50%. The move was in line with market expectations, although some analysts had expected the board to continue easing its monetary policy stance due to a subdued inflationary outlook and weaker domestic demand.

Below-target inflation, continued softness in the housing market and a weak global trade backdrop were taken into account in the Bank’s decision. Nonetheless, the board ultimately stood pat owing to stronger-than-expected growth in the first quarter. Moreover, increased spending in the 2019 budget, together with a fall in mortgage rates and the government’s decision to scrap the planned capital gains tax, further improves the outlook for domestic demand and led the RBNZ to adopt a wait-and-see approach. That said, protracted softness in the housing market and negative business sentiment continue to cast a shadow on domestic spending.

In its forward-looking guidance, the RBNZ left the door open to further rate cuts. Intensifying global trade tensions, a cooling in global growth and looser monetary policy stances in the main central banks abroad could lead the RBNZ to cut rates as soon as at its next meeting.

The next monetary policy meeting is scheduled for 7 August.

FocusEconomics panelists are still taking the recent rate cut into account. The current consensus is for the OCR to end 2019 at 1.62%. Our panelists see it increasing the following year and ending 2020 at 1.73%.


Author: Massimo Bassetti, Economist

Sample Report

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

Download

New Zealand Monetary Policy Chart


New Zealand Monetary Policy June 2019

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


New Zealand Economic News

  • 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

  • New Zealand: Business confidence jumps again in December

    December 20, 2019

    The ANZ bank business outlook indicator surged in December but nevertheless a net 13.2% of firms still reported that they expect general business conditions to deteriorate in the year ahead, from a net 26.4% in November.

    Read more

  • New Zealand: Growth jumps on buoyant consumer spending in Q3

    December 20, 2019

    The economy climbed 0.7% in quarter-on-quarter seasonally-adjusted terms in the third quarter, well above Q2’s revised 0.1% uptick (previously reported: +0.5% quarter-on-quarter seasonally-adjusted).

    Read more

  • New Zealand: Consumer confidence rises further in November

    November 29, 2019

    The ANZ-Roy Morgan consumer confidence indicator rose to 120.7 in November (October: 118.4), moving further above the 100-threshold that separates optimism from pessimism among consumers and printing the best result in five months. Consumers grew more optimistic about their future personal finances, and their expectations on next year’s economic outlook and on the five-year general economic outlook improved significantly.

    Read more

More news

Search form