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There remains a wide range of views amongst the NZIER Policy Shadow Board on the appropriate level of the OCR at the Monetary Policy Statement (MPS) release on Wednesday.

The added uncertainty over how long the coronavirus will persist means that Shadow Board members deemed it prudent for the Reserve Bank to wait and see how the effects play out,” said Christina Leung, Principal Economist at NZIER.

Key notes

Although Shadow Board members acknowledged the positive developments in the New Zealand economy, the recent coronavirus outbreak has introduced further uncertainty over the global growth outlook. Overall, Shadow Board members still called for the OCR to be kept on hold.

“Shadow Board members highlighted the uncertainty over how the coronavirus will affect demand for New Zealand exports. Other than that, developments have largely been positive. Households are feeling optimistic as housing market activity picks up, and business confidence is recovering as the Government signals a greater willingness to spend on infrastructure.