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Dominick Stephens Chief Economist at Westpac, suggests that today they are changing their RBNZ OCR call as previously, their forecast was that the OCR would remain on hold at 1.75% until November 2019, and would rise slowly after that, but their new forecast is that the OCR will remain on hold until May 2020 and will rise slowly thereafter.

Key Quotes

“We have shifted out our forecast for OCR hikes.”

“We are now forecasting that the OCR will remain on hold until May 2020 (previously November 2019).”

“This is due to a change in the RBNZ’s behaviour, rather than any surprise about the state of the economy.”

“We take the risk of OCR cuts over the coming year seriously. We put the odds of a cut at at least one in three.”

“However, we expect the economic data to improve shortly, so we think cuts are more likely to be averted.”