ANZ NZ Sees RBNZ hiking 50bps in both April and May

By Sophia Rodrigues

Published On 08 Mar 2022 , 09:11 AM

Economists at ANZ New Zealand have revised their call for the RBNZ OCR, now expecting 50bps hike at each of the meetings in April and May, that would take the rate to 2.0% (1.0% now).

They now see the OCR reaching a peak of 3.5% in April 2023 (3% previously). The rate call is despite clearly mounting downside growth risks, both in New Zealand and globally and expectations of 10% fall in house prices.

"The OCR call change comes primarily on the back of our updated CPI forecasts that now have inflation peaking at a broad-based 7.4% in Q2, rather than the RBNZ’s MPS forecast of a 6.6% peak in Q1," ANZ wrote in a note.

"The RBNZ would prefer to look through oil price shocks, but right now, with inflation expectations so high and rising, they just can’t.

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