In the view of the analysts at Bank of New Zealand (BNZ), the Reserve Bank of New Zealand (RBNZ) is expected to cut the key rates by 25 bps at its monetary policy decision due on Wednesday at 0200 GMT, leaving doors open for another rate cut in August.
Key Quotes:
“Immediately after May’s Monetary Policy Statement (MPS) we highlighted that the Reserve Bank would be cutting rates again. At that time we noted that we were “ambivalent between August and November” with regard to timing.
Given latest developments, and from our economic commentaries over recent weeks, it should be clear to all that our ambivalence has shifted in favor of August.
Thus, no cut at this meeting. But, there is a but!
There is a solid risk the RBNZ is goaded into cutting its OCR a further 25 basis points, to 1.25%, this week.
It will probably sound dovish enough, in its text, to leave the market largely pricing another 25bp cut at the August Monetary Policy Statement.”
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