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Analysts at ANZ expect the RBNZ to leave the OCR unchanged at 1.75% at its Monetary Policy Statement next Thursday at 9am.

Key Quotes

“The RBNZ will reaffirm that the next move in the OCR could be up or down.”

“Since the August Monetary Policy Statement, Q2 GDP and Q3 CPI both surprised on the upside. This certainly gives the RBNZ a little more breathing room, but policy deliberations will remain focused on the balance of medium-term risks.”

“The RBNZ is likely to still conclude that a marked acceleration in GDP growth is required from here to ensure medium-term inflation heads sustainably back to target.”

“On balance, we therefore expect to see a flatter OCR track than in the August Statement, with eventual OCR increases pushed out a little further. It is also possible that the RBNZ simply go to a flat track, underscoring their rhetoric that the next OCR move could be up or down.”

“A Statement in line with our expectations could come as a surprise to markets.”

“We currently see the OCR on hold for the foreseeable future. It will be difficult for the economy to accelerate and to sustain stronger inflation over the medium term.”

“We see risks being tilted towards the next OCR move being a cut, but we are mindful of risks on both sides of the ledger.”