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Dominick Stephens, chief economist at Westpac, notes that the RBNZ has downgraded its OCR projection and sounded slightly more dovish than November, in line with Westpac’s expectations.

Key Quotes

“The RBNZ remains upbeat on the economy and is focussed on burgeoning capacity  pressures.”

“Some of the RBNZ’s analysis is out of date. There may be a further dovish tilt once the latest information is incorporated.”

“Like us, the RBNZ views the impact of bank capital requirements on the OCR as transitory, not as something that could affect the neutral  OCR.”