NZD/USD higher after the larger than expected interest rate hike from the RBNZ
Reserve Bank of New Zealand raised its cash rate by 0.5% vs. the 0.25% consensus expectation
says will remain focused on ensuring that current high consumer price inflation does not become embedded into longer-term inflation expectations.
monetary tightening brought forward
remained comfortable with the outlook for the OCR as outlined in their February MPS
moving the OCR to a more neutral stance sooner will reduce the risks of rising inflation expectations.
larger move now also provides more policy flexibility ahead in light of the highly uncertain global economic environment
From the minutes to the meeting, these are released at the same time as the decision:
committee noted that the OCR is stimulatory at its current level
members agreed that this ‘stitch in time’ approach is consistent with near-term financial market pricing
members noted that annual consumer price inflation is expected to peak around 7 percent in the first half of 2022
committee agreed that their policy ‘path of least regret’ is to increase the OCR by more now, rather than later
members noted that inflation is above target and employment is above its maximum sustainable level
the committee confirmed that further increases in the OCR are needed in order to meet their mandate
NZD has been marked higher on the announcement:
Reserve Bank of New Zealand raised its cash rate by 0.5% vs. the 0.25% consensus expectation
says will remain focused on ensuring that current high consumer price inflation does not become embedded into longer-term inflation expectations.
monetary tightening brought forward
remained comfortable with the outlook for the OCR as outlined in their February MPS
moving the OCR to a more neutral stance sooner will reduce the risks of rising inflation expectations.
larger move now also provides more policy flexibility ahead in light of the highly uncertain global economic environment
From the minutes to the meeting, these are released at the same time as the decision:
committee noted that the OCR is stimulatory at its current level
members agreed that this ‘stitch in time’ approach is consistent with near-term financial market pricing
members noted that annual consumer price inflation is expected to peak around 7 percent in the first half of 2022
committee agreed that their policy ‘path of least regret’ is to increase the OCR by more now, rather than later
members noted that inflation is above target and employment is above its maximum sustainable level
the committee confirmed that further increases in the OCR are needed in order to meet their mandate
NZD has been marked higher on the announcement: