Money in New Zealand
New Zealand - Money
RBNZ on hold in February
On 12 February, the Reserve Bank of New Zealand (RBNZ) kept the official cash rate (OCR) unchanged. The Bank unexpectedly cut the rate by 50 basis points in August. Therefore, the OCB stays at an all-time low of 1.00%. The Bank dropped any reference to further monetary policy easing ahead, and, instead, highlighted that the current low level of interest rates remains necessary to keep employment and inflation around the target. The move matched markets’ expectations.
Although the RBNZ acknowledged that softness in economic activity carried over into early 2020, it also noted employment is hovering slightly above its maximum sustainable levels and inflation is close to midpoint of the target range of 1.0%–3.0%, thus prompting the Bank to stand pat. Moreover, although growth was soft overall in 2019, the economy should strengthen ahead thanks to low interest rates and some fiscal stimulus, while risks stemming from trade tensions eased as of late.
In its forward-looking guidance, the RBNZ stated that it considers current loose monetary policy conditions to be providing adequate support to domestic demand. Weak economic performances in Australia and China coupled with a stronger-than-projected economic impact of coronavirus could prompt the RBNZ to further cut rates in the near future, however.
The next monetary policy meeting is scheduled for 25 March.
Our panelists project that the OCR will end 2020 at 0.82% and 2021 at 0.90%.
New Zealand - Money Data
| 2014 | 2015 | 2016 | 2017 | 2018 | |
|---|---|---|---|---|---|
| Money (annual variation in %) | 10.3 | 14.2 | 2.1 | - | - |
New Zealand Money Chart
Source: Reserve Bank of New Zealand and FocusEconomics calculations.
New Zealand Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 1.67 | 1.20 % | Dec 30 |
| Exchange Rate | 0.67 | -1.69 % | Jan 01 |
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Economic News
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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.
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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%).
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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.
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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.
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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).
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