Reserve Bank of New Zealand (RBNZ) news

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  • 12 February 2020, 07:06
    Reserve Bank of New Zealand leaves cash rate at 1%
    • RBNZ forecasts for the OCR show they do not expect to cut this year at all

    • Sees official cash rate at 1.01% in June 2020 (previous 0.9%)

    • Sees official cash rate at 1.03% in March 2021 (previous 0.9%)

    • Sees official cash rate at 1.1% in June 2021 (previous 0.94%)


    • Overall impact of coronavirus on New Zealand will be of a short duration

    • Risks that impact will be larger and more persistent

    • Low rates necessary to keep employment and inflation around target

    • economic growth expected to accelerate over second half of 2020

    • Employment is at or slightly above its max sustainable level

    • Inflation close to 2% mid point

    • Committee agreed low interest rates had helped to get employment and inflation to around their target levels

    • Committee discussed financial stability risks from ongoing low rates

    • Members noted the bank's assessment that marginal changes to the ocr would not materially affect these risks at this time

    • Members discussed the better mix of policy stimulus in the projections, given additional fiscal stimulus is reducing the burden on monetary policy

    • Committee discussed alternative cash rate settings and the various trade-offs involved

  • 27 March 2019, 07:01
    Reserve Bank of New Zealand (RBNZ) kept the official cash rate (OCR) at 1.75% as expected

    • RBNZ says next rate move is likely down

    • Balance to inflation risks have shifted to downside

    • Employment is near its maximum sustainable level

    • Core consumer price inflation remains below our 2 percent target mid-point, necessitating continued supportive monetary policy

    • Global economic outlook has continued to weaken

    • Domestic growth slowed in 2018, with softness in the housing market and weak business investment contributing

    • We expect ongoing low interest rates, and increased government spending and investment, to support economic growth over 2019

    • Balance of risks to this outlook has shifted to the downside

    • inflation could rise faster if firms pass on cost increases to prices to a greater extent

  • 13 February 2019, 07:06
    RBNZ'S Governor Orr: chance of rate cut have not increased
    • risks around rates are balanced

    • If growth does not pick up a rate cut may be required

    • exchange rate has been "remarkably well behaved in recent times"

    • open minded on capital requirement submissions

    • proposed bank capital levels well within norms

    • Inflation expectations are well anchored

  • 13 February 2019, 07:00
    RBNZ leaves cash rate unchanged, and said the direction of next cash rate move could be up or down

    • we expect to keep the OCR at this level through 2019 and 2020.

    • employment is near its maximum sustainable level.

    • core consumer price inflation remains below our 2 percent target mid-point, necessitating continued supportive monetary policy.

    • sees annual CPI 1.7 pct by march 2020

    • keep cash rate expansionary for considerable period

    • risk of a sharper downturn in trading partner growth has heightened

    • upside and downside risks to inflation

    • despite the weaker global impetus, we expect low interest rates and government spending to support a pick-up in New Zealand’s GDP growth over 2019.

    • low interest rates, and continued employment growth, should support household spending and business investment.

    • government spending on infrastructure and housing also supports domestic demand.

    • we will keep the OCR at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low and stable inflation.

  • 9 August 2018, 07:21
    RBNZ Official Cash Rate (OCR) remains at 1.75 percent, as expected

    Statement by Reserve Bank Governor Adrian Orr:

    "The Official Cash Rate (OCR) remains at 1.75 percent. We expect to keep the OCR at this level through 2019 and into 2020, longer than we projected in our May Statement. The direction of our next OCR move could be up or down.

    While recent economic growth has moderated, we expect it to pick up pace over the rest of this year and be maintained through 2019.

    Robust global growth and a lower New Zealand dollar exchange rate will support export earnings. At home, capacity and labour constraints promote business investment, supported by low interest rates. Government spending and investment is also set to rise, while residential construction and household spending remain solid.

    The labour market has tightened over the past year and employment is roughly around its maximum sustainable level. We expect the unemployment rate to decline modestly from its current level.

    There are welcome early signs of core inflation rising. Inflation will increase towards 2 percent over the projection period as capacity pressures bite. This path may be bumpy however, with one-off price changes from global oil prices, a lower exchange rate, and announced petrol excise tax rises expected. We will look through this volatility as appropriate, and only respond to any persistent movements in inflation".

  • 9 June 2016, 08:09
    Reserve Bank of New Zealand keeps its interest rate unchanged at 2.25% in June

    The Reserve Bank of New Zealand (RBNZ) on Wednesday kept its interest rate unchanged at 2.25% as widely expected by analysts.

    The RBNZ Graeme Wheeler said that New Zealand's economy was supported by strong inward migration, construction activity, tourism, and the central bank's accommodative monetary policy.

    He pointed out on Wednesday that further monetary policy easing was possible.

    "Further policy easing may be required to ensure that future average inflation settles near the middle of the target range," he said, adding that the monetary policy will depend on the incoming economic data.

    Wheeler noted that the New Zealand dollar was "higher than appropriate", adding that a weaker currency was desirable.

    The RBNZ governor also said that inflation was low, driven by lower prices for fuel and other imports, but long-term inflation expectations were well-anchored at 2%.

    Wheeler pointed out that there were risks to inflation forecasts from the possible high net immigration and pressures in the housing market.

    The RBNZ lowered its interest rate to 2.25% from 2.50% in March. This decision was not expected by market participants.

  • 17 May 2016, 15:55
    Reserve Bank of New Zealand’s inflation expectations for the next 12 months rise to 1.22% in the three months to May

    According to the Reserve Bank of New Zealand's survey published on Tuesday, New Zealand's inflation expectations for the next 12 months rose to 1.22% in the three months to May from 1.09% the previous quarter.

    Inflation expectations for the next 24 months were up to 1.64% from 1.63%.

  • 11 May 2016, 08:09
    Reserve Bank of New Zealand Graeme Wheeler: risks to the financial stability have increased

    The Reserve Bank of New Zealand (RBNZ) released its Financial Stability Report on Tuesday. The RBNZ Graeme Wheeler said that risks to the financial stability have increased further in the past six months.

    "Although New Zealand's economic growth remains solid, the outlook for the global economy has deteriorated. Despite highly accommodative monetary policies and low oil prices, growth is slowing in a number of trading partner economies," he said.

    "Dairy prices remain low with global dairy supply continuing to increase. Many farmers now face a third season of negative cash flow with heavy demand for working capital," the RBNZ governor added.

    Wheeler expressed concerns about a rise in prices in the Auckland housing market, adding that the imbalance between housing demand and supply in Auckland should be reduced.

  • 28 April 2016, 09:21
    Reserve Bank of New Zealand keeps its interest rate unchanged at 2.25% in April

    The Reserve Bank of New Zealand (RBNZ) on Wednesday kept its interest rate unchanged at 2.25% as widely expected by analysts.

    The RBNZ Graeme Wheeler said that New Zealand's economy was supported by strong inward migration, construction activity, tourism, and the central bank's accommodative monetary policy.

    He pointed out on Wednesday that further monetary policy easing was possible.

    "Further policy easing may be required to ensure that future average inflation settles near the middle of the target range," he said.

    Wheeler noted that the New Zealand dollar remained high, adding that a weaker currency was desirable.

    The RBNZ governor also said that inflation was low, driven by lower prices for fuel and other imports.

    Wheeler pointed out that there were risks to the outlook from to weakness in the dairy sector, the fall in inflation expectations, the possible high net immigration, and pressures in the housing market.

    The RBNZ lowered its interest rate to 2.25% from 2.50% in March. This decision was not expected by market participants.

  • 10 March 2016, 09:53
    Reserve Bank of New Zealand lowers its interest rate to 2.25% in March

    The Reserve Bank of New Zealand (RBNZ) on Wednesday lowered its interest rate to 2.25% from 2.50%. This decision was not expected by market participants.

    The RBNZ Graeme Wheeler pointed out on Wednesday that further monetary policy easing was possible.

    "Further policy easing may be required to ensure that future average inflation settles near the middle of the target range," he said.

    He noted that there were risks to the outlook from the weakness in the dairy sector, the fall in inflation expectations, the high net immigration, and pressures in the housing market.

    The RBNZ governor also said that inflation was low, driven by lower prices for fuel and other imports, adding that headline inflation was expected to rise over 2016.

    Wheeler pointed out that the outlook for global growth deteriorated since the December, due the slowdown in emerging markets, and slower growth in Europe.

  • 3 February 2016, 10:06
    Reserve Bank of New Zealand Governor Graeme Wheeler: the interest rate cut is not “a mechanistic approach”

    The Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler said in a speech on Wednesday that the interest rate cut is not "a mechanistic approach". But he noted that further policy easing could be needed if concerns about the global economy will deepen.

    "If concerns deepen around the prospects for the global economy and its impact on New Zealand, some further policy easing may be needed over the coming year to ensure future average inflation settles near the middle of the target range," Wheeler said.

  • 28 January 2016, 09:39
    Reserve Bank of New Zealand keeps its monetary policy unchanged in January

    The Reserve Bank of New Zealand (RBNZ) released its interest rate decision on Wednesday. The RBNZ kept its interest rate unchanged at 2.5% as widely expected by analysts.

    The central bank hinted that further monetary policy easing is possible, but it will depend on the incoming economic data.

    "Some further policy easing may be required over the coming year to ensure that future average inflation settles near the middle of the target range," the RBNZ Governor Graeme Wheeler said.

    He noted that the inflation and the economic growth in New Zealand are expected to rise in 2016, adding that global growth, global financial market conditions, dairy prices, net immigration, and pressures in the housing market are risks to the outlook.

    The RBNZ governor also said that a further depreciation of the New Zealand dollar was appropriate due to low export prices.

    Wheeler noted that house price inflation in Auckland is a risk to financial stability.

    The RBNZ lowered its interest rate to 2.50% from 2.75% in December.

  • 10 December 2015, 09:52
    Reserve Bank of New Zealand lowers its interest rate to 2.50%

    The Reserve Bank of New Zealand (RBNZ) on Wednesday lowered its interest rate to 2.50% from 2.75%. The RBNZ Graeme Wheeler said on Wednesday that New Zealand's economy softened in 2015, "due mainly to lower terms of trade".

    He noted that consumer price inflation in New Zealand is below the 1 to 3% target range, mainly due to the stronger New Zealand dollar and low global oil prices. The RBNZ governor expects that inflation will return inside the target range.

    Wheeler said that the central bank plans to achieve the inflation target without any further interest rate cuts, "although the Bank will reduce rates if circumstances warrant".

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