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The Reserve Bank of New Zealand will announce its monetary policy decision this Wednesday at 01:00 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of 10 major banks regarding the upcoming central bank’s meeting.

Regarding the NZD/USD pair, the kiwi has room to extend its advance, mainly on a break above 0.7100, according to FXStreet’s Chief Analyst Valeria Bednarik.

Capital Economics

“New Zealand has probably experienced a second technical recession over the past couple of quarters. Even so, the labour market continues to recover and inflation is in good shape. So the Bank shouldn’t feel the need to deliver more stimulus. We expect the RBNZ to keep policy settings unchanged. And given the solid rebound in activity and in the labour market that we think lies ahead, we expect the RBNZ to hike rates next year.”


“We expect the RBNZ to leave the OCR at 0.25% and do not expect any changes to the overall size, duration and general terms of the FLP and LSAP programmes. The RBNZ is likely to play with a straight bat, reiterating its ‘wait and see’ and ‘least regrets’ approaches to policy. The data-flow is starting to soften, but this is consistent with the RBNZ (and our) forecasts that harder yards lie ahead for the economy. Housing tax policy changes represent a new downside risk, but there are upside risks for both activity and inflation as well, including the trans-Tasman travel bubble.”


“We expect no change in monetary policy settings with the OCR on hold at 0.25% for the foreseeable future. A softer than expected starting point for the New Zealand economy will be balanced against a rapidly improving global outlook. The Government’s housing policy announcement last month will have only a moderate impact on the RBNZ’s house price forecasts, which were already on the conservative side. The RBNZ is already braced for a near-term spike in inflation. But it will reiterate that a sustained return to its inflation and employment goals is a considerable time away.”

Standard Chartered

“We expect the RBNZ to keep the official cash rate (OCR) unchanged at 0.25% and maintain the current monetary policy settings. The central bank is likely to retain its accommodative monetary policy stance given the still nascent economic recovery, significant uncertainty and weak overall sentiment. The government announced housing-sector measures on 23 March to curb rising home prices; these aim to increase the supply of homes and remove speculative incentive, while providing support to first-time home buyers. We believe the RBNZ’s setting of monetary policy is unlikely to be driven by housing prices, but it will likely welcome the government’s announcement, having long stressed that factors other than low interest rates affect housing prices. The market pricing of rate hikes eased after the government measures were announced.”


“Expect all policy settings to be left unchanged with no reason for the Bank to deviate from its message that ‘considerable time and patience’ will be required to meet its objectives. The Bank will highlight the pick in global activity/Trans-Tasman bubble reopening, but note the unsteady global vaccine roll-out, weaker domestic data and Government changes to NZ housing policy.”


“The RBNZ should simply reiterate that prolonged stimulus remains necessary, and the impact on NZD, which seems to be pricing in most negatives should be limited. Housing demand appears to be weakening after some government measures but their effectiveness will be key in keeping rate expectations capped.”


“The RBNZ said then that inflation and employment are likely to remain below targets and so ‘prolonged’ monetary stimulus remains necessary. It said that it will look through temporary price shifts and is prepared to provide additional stimulus if required.  We expect this dovish tone to be maintained at this meeting. While the bank may again pay lip service to negative rates, it’s worth noting that they have now been priced out fully by the markets. Any further stimulus would likely come from more QE.”  


“Citi cash rate forecast; +25bp (no change). Despite further improvements in global activity, MPC will likely continue to convey a dovish message given the unexpected negative Q4 2020 GDP result of -1.0% is a reminder that the path to complete recovery is not linear.”

Danske Bank

“We expect the RBNZ to keep its policy rate unchanged at 0.3% in its monetary policy statement.”


“With mixed macro forces and with QE continuing elsewhere, and US Fed Chair continuing to sound patient, we expect no change to policy and little or no change to policy guidance from RBNZ. Solid growth in NZ’s major trading partners (China and Australia) and higher dairy prices remain positive forces for NZD and we still expect NZD/USD to grind higher over the year, with the risk factor being difficult-to-predict swings in global sentiment.”