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26 Apr 2016
RBNZ 'shadow board' recommends rates on hold this week
Ahead of the Reserve Bank of New Zealand policy meeting, due on April 27th at 21 GMT, the New Zealand Institute of Economic Research (NZIER) Monetary Policy "Shadow Board" recommends the RBNZ to hold rates unchanged this meeting.
Key Quotes
"The Reserve Bank surprised many by cutting the OCR by 25 basis points at the March meeting. Inflation remains very low, in contrast to the continued lift in house prices. Indeed, the strengthening in house prices is broadening beyond Auckland"
"The Shadow Board sees balanced risks to the current level of interest rates. Continued low inflation and the recent rebound in the New Zealand dollar would suggest the need for lower interest rates, but the Reserve Bank will be concerned with the increased financial stability risks from strong house price inflation. As such, the Shadow Board sees a 2.25% OCR as the most appropriate setting for interest rates."
Key Quotes
"The Reserve Bank surprised many by cutting the OCR by 25 basis points at the March meeting. Inflation remains very low, in contrast to the continued lift in house prices. Indeed, the strengthening in house prices is broadening beyond Auckland"
"The Shadow Board sees balanced risks to the current level of interest rates. Continued low inflation and the recent rebound in the New Zealand dollar would suggest the need for lower interest rates, but the Reserve Bank will be concerned with the increased financial stability risks from strong house price inflation. As such, the Shadow Board sees a 2.25% OCR as the most appropriate setting for interest rates."