Reserve Bank of New Zealand Holds Rate at 2.75% in Surprise 4-3 Vote, Signals Further Increases Likely
The Reserve Bank of New Zealand (RBNZ) announced in Wellington on October 28 that its Monetary Policy Committee voted 4 to 3 to hold the official cash rate (OCR) at 2.75%. Markets had priced in a near-certain increase: 22 of 27 economists in a Reuters poll expected a 25-basis-point hike, and the New Zealand dollar fell as much as 1.7% after the decision.
The Bank said annual consumer price inflation eased to 3.7% in the September quarter, from 4.1% in June, but remains above its 1% to 3% target band. With fuel prices high and the exchange rate down about 3% since early September, inflation is expected to rise to around 4.4% in the December quarter. Committee members shared the same overall inflation outlook but differed on the relative weight of risks and the timing of further tightening; the Committee judged that tighter monetary policy would likely be necessary, conditional on the outlook.
Governor Anna Breman told reporters the Bank expects to see further OCR increases and would likely consider another hike in December, when it releases fresh forecasts, noting that two increases delivered in July and September are still working through the economy. She said November's election was not a factor in the decision. The next policy decision is scheduled for December 9.
Source: GSM · USA (original Chinese edition)
Photo: 新西兰储备银行大楼，位于新西兰惠灵顿。Panamitsu 摄，CC BY-SA 4.0，经 Wikimedia Commons。 / The Reserve Bank of New Zealand building in Wellington, New Zealand. Photo by Panamitsu, CC BY-SA 4.0, via Wikimedia Commons.
