RBNZ Ups OCR 50bps to 2.0%
By Sophia Rodrigues
Published On 25 May 2022 , 12:15 PMThe Reserve Bank of New Zealand raised official cash rate by 50bps to 2.0%, as widely expected and issued hawkish projection pointing to around 140bps of more rate rises this year.
The latest increase takes the policy rate to 2.0%, and the RBNZ is now projecting OCR of 3.4% by this year-end, up from just 2.2% in the February Monetary Policy Statement.
The RBNZ’s projection is exactly in line with money market’s expectation for OCR to reach 3.4% by the November board meeting.
The RBNZ said it will “maintain its approach of briskly lifting the OCR until convinced that monetary conditions were sufficient to constrain inflation expectations and bring consumer price inflation to within the target range.”
Stabilising inflation is its priority, the RBNZ said, adding that “stabilising inflation expectations will be a key indicator that the current monetary policy strategy is working.”
The RBNZ lifted its projection for peak OCR to 3.9% from 3.4% in February and, more importantly, expects to reach this level by June 2023.
The RBNZ said the forecast for higher interest rates reflects a stronger starting point for capacity pressures than originally assumed, including even longer delays in making and delivering goods than anticipated.
LATEST SNIPPETS
RBA buying A$3B bonds, April 2026-April 2029 maturity
The RBA is continuing with its bond-buying spree under the yield target policy but after two days of focusing on the...
Published on : 30 Mar 2020 , 11:57 AMRBA to publish minutes on April 1 of special March board meeting
RBA will publish on April 1 the minutes of the special monetary policy announcement made on March 19. The meeting too...
Published on : 23 Mar 2020 , 06:15 PMRBA Parliamentary Hearing Bit Unusual But Not Extraordinary
RBA deputy governor Guy Debelle will be appearing before the Economics Legislation Committee in Canberra late evening...
Published on : 04 Mar 2020 , 03:26 PMEx-centralbanker Says RBA Might Do 25+25, Not 50
An ex-centralbanker with strong experience in monetary policy during the global financial crisis says the RBA is more...
Published on : 02 Mar 2020 , 02:44 PMWestpac Evans Expects RBA Cut Tue, QE by mid-year
Not much forecasting on RBA by Westpac's chief economist Bill Evans other than a 25bps cut in the cash rate...
Published on : 02 Mar 2020 , 11:14 AMAustralia Westpac-MI Consumer Sentiment Up But House Price Expectations More Imp For RBA
Consumer sentiment rose 2.3% to 95.5 in February, more than rebounding from the 1.8% fall in January, the Westpac-Mel...
Published on : 12 Feb 2020 , 10:41 AMMy tweets from first session of RBA's Parliamentary testimony today
RBA Lowe: If the unemployment rate were to be moving MATERIALLY in the wrong direction n there was no further progres...
Published on : 07 Feb 2020 , 10:59 AMWestpac's Evans Now Expects RBA Cut in April, Aug (Previously Feb, June)
Westpac's chief economist Bill Evans has pushed back his forecast for RBA cash rate cut to April from February, c...
Published on : 24 Jan 2020 , 11:26 AMANZ No Longer Forecasting RBA Feb Cut
Economists at ANZ have removed RBA cut in February from their forecast following the strength in employment in Novemb...
Published on : 23 Jan 2020 , 01:37 PMAustralia Consumer House Price Sentiment Could Justify RBA Hold in Feb
Consumer sentiment fell 1.8% to 93.4 in January from 95.1, the Westpac-Melbourne Institute Index of Consumer Sentimen...
Published on : 22 Jan 2020 , 11:36 AM