Interest Rate in New Zealand
New Zealand - Interest Rate
RBNZ on hold in November
On 13 November, the Reserve Bank of New Zealand (RBNZ) kept the official cash rate (OCR) unchanged, after having unexpectedly cut the rate by 50 basis points in August. Therefore, the OCB stays at an all-time low of 1.00%. The Bank also indicated the possibility of further easing monetary policy ahead amid weak demand conditions and a subdued inflationary environment. The move surprised markets, which had expected a 25-point cut, and boosted the kiwi, which recorded its biggest daily gain against the USD in a year.
Although the RBNZ acknowledged that softness in economic activity carried over into the second half of the year, it also noted that the monetary policy transmission mechanism is gradually translating into lower lending rates and weakening the exchange rate, thus prompting the Bank to stand pat. Moreover, inflation remained within the target range of 1.0%–3.0% in Q3, and the Bank expects it to rise to the band’s midpoint as wage growth strengthens and non-tradable goods inflation increases following the latest policy cut, while employment continues to hover around its maximum sustainable level. And while downbeat business sentiment and weak global growth point to a subdued H2, the economy should strengthen ahead thanks to low interest rates and some fiscal stimulus; that said, risks stemming from trade tensions remain high.
In its forward-looking guidance, the RBNZ stated that it considers current loose monetary policy conditions to be providing adequate support to domestic demand but also signaled the possibility of further rate cuts. Reigniting trade tensions, weakening global growth and the dovish stance of major central banks could prompt the RBNZ to further cut rates in the near future.
The next monetary policy meeting is scheduled for 12 February.
FocusEconomics panelists are still taking the recent rate cut into account.
New Zealand - Interest Rate Data
|Policy Interest Rate (%)||2.50||3.50||2.50||1.75||1.75|
5 years of economic forecasts for more than 30 economic indicators.
New Zealand Interest Rate Chart
Source: Reserve Bank of New Zealand and FocusEconomics calculations.
New Zealand Facts
|Bond Yield||1.35||1.20 %||Nov 21|
|Exchange Rate||0.64||-1.69 %||Nov 21|
|Stock Market||4,709||0.11 %||Nov 21|
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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.
New Zealand: Business confidence jumps but remains deeply entrenched in pessimistic territory in November
November 29, 2019
The ANZ bank business outlook indicator surged 16.0 points in November, the highest print this year, but nevertheless a net 26.4% of firms still reported that they expect general business conditions to deteriorate in the year ahead.
November 13, 2019
On 13 November, the Reserve Bank of New Zealand (RBNZ) kept the official cash rate (OCR) unchanged, after having unexpectedly cut the rate by 50 basis points in August.
November 6, 2019
The seasonally-adjusted unemployment rate rose to 4.2% in Q3 from an 11-year low of 3.9% the previous quarter.
November 4, 2019
The ANZ-Roy Morgan consumer confidence indicator jumped to 118.4 in October (September: 113.9), moving further away from the 100-threshold that separates optimism from pessimism among consumers and printing the best result in four months. Consumers had better assessments about their current financial situation compared to one year ago, and they also grew more optimistic about their future personal finances.