Archive

New Zealand Policy Rate 5.25% (consensus 5.5%) in Aug-24

• The RBNZ unexpectedly reduced the OCR by 25 basis points to 5.25%, citing weakening domestic economic activity and a decline in inflationary pressures, contrasting with the economic consensus of no change.
• The decision reflects a balance between maintaining restrictive monetary policy to ensure inflation remains anchored and responding to broader global trends of easing inflation and subdued economic growth.
• Future interest rate decisions will be influenced by the pace at which domestic inflation pressures dissipate, the stability of inflation expectations, and the evolving global economic conditions.

New Zealand Policy Rate 5.5% (consensus 5.5%) in Jul-24

• The Reserve Bank of New Zealand's decision to maintain the OCR at 5.50% aligns with the economic consensus and reflects a continued commitment to restrictive monetary policy to control inflation.
• Domestic inflation pressures, particularly in sectors less sensitive to interest rates, and global economic trends, including subdued growth among trading partners, will heavily influence future interest rate decisions.
• Financial conditions and fiscal policy dynamics, including weak credit growth, rising funding costs, and the impact of government spending and tax cuts, will also help shape the RBNZ's monetary policy outlook.

New Zealand Policy Rate 5.5% (consensus 5.5%) in May-24

• The RBNZ maintained its policy rate at 5.50%, in line with economic consensus, emphasizing the need for restrictive monetary policy to control inflation.
• Domestic inflation remains above the target range, driven by higher costs in non-tradable sectors; future rate decisions will depend on the pace of inflation reduction and adjustment of inflation expectations.
• Global economic growth remains subdued with variations among trading partners; cautious global monetary policy and labour market dynamics will significantly influence the RBNZ's future interest rate trajectory.

New Zealand Unemployment Rate 4.3% (consensus 4.2%) in Q1-24

- New Zealand's unemployment rate increased surprisingly far in Q1-24 to 4.3%, surpassing the one-year average by 0.35 percentage points and the long-run average by 0.70 percentage points.
- Employment contracted by 0.2% quarter-on-quarter, but labour costs rose by 0.8% q-o-q and 3.8% y-o-y.