The New Zealand Institute of Economic Research has stated that it has once again revised the format of the views they are seeking from our Shadow Board on what the Reserve Bank should do with monetary policy.
”Given the Reserve Bank’s growing arsenal of monetary policy tools which includes the Official Cash Rate, quantitative easing, and Funding for Lending Programme, we decided to simply ask our Shadow Board on what stance the Reserve Bank should take 1) at the upcoming meeting, and 2) over the coming 12 months.”
”There was a wide range of views amongst board members.”
”For the upcoming meeting, members were generally in favour of leaving the monetary policy stance unchanged given the improving outlook balanced against the high degree of uncertainty. However, beyond that board members were divided between leaving the monetary policy stance unchanged and tightening monetary policy. Those who indicated a tightening of monetary policy was appropriate cited a lift in inflation pressures and the overheating housing market as key factors warranting the change.”
Market implications
NZD is on the backfoot in a correction of a powerful series of bids at the end of last week. The sentiment that the Reserve Bank is not on the verge of easing further is a positive backdrop for the bird as the market focusses on The Federal Reserve this week.
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