Official cash rate (OCR) from 0.5% to 0.75% now.
- The Committee agreed it remains appropriate to continue reducing monetary stimulus so as to maintain price stability and support maximum sustainable employment
RBNZ projections for the path ahead:
- sees official cash rate at 0.94% in March 2022 (previously 0.86%)
- at 2.14% in December 2022 (pvs 1.62%)
- at 2.3% in March 2023 (pvs 1.77%)
- at 2.61% in December 2024
Sees annual CPI 3.3% by December 2022 (pvs 2.2%)
More from the Bank’s communications:
- says headline CPI inflation is expected to measure above 5 percent in the near term before returning towards the 2 percent midpoint over the next two years.
- says immediate relative price shocks risk generating more generalised price rises
- capacity pressures have continued to tighten
- broad range of economic indicators highlight that the New Zealand economy continues to perform above its current potential.
- household spending and business investment will be dampened in the near-term by ongoing covid-19 health uncertainties
- says recent nationwide health-related lockdown and restrictions in Auckland resulted in a sharp contraction in economic activity
- says capacity pressures have continued to tighten
Governor Orr’s news conference is coming up at 0200 GMT.
After the knee-jerk dip in the kiwi$ on the widely-expected announcement of a 25bp hike NZD/USD is down a few points