The Reserve Bank of New Zealand (RBNZ) could cut the overnight cash rate by 25 basis points in May, having adopted a strong dovish stance last week, according to analysts at Goldman Sachs.
Key points
May rate cut is a close call. There is a material risk that the rate cut is delayed to either the June/August meeting
However, it’s also possible that weaker near-term sentiment sees the RBNZ cut rates (potentially twice) in mid-2019.
RBNZ appears to be placing considerably more weight on downside risks to global growth and the NZD and has become less tolerant of the growth slowdown in mid-2018 and ongoing soft business surveys.
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