The Reserve Bank of New Zealand decided to keep interest rates unchanged at today’s meeting. The official interest rate remained unchanged at 5.5%, in line with market expectations. The move was prompted by an upward revision of the RBNZ’s interest rate forecasts and bearish comments from RBNZ Governor Orr.
RBNZ interest rate forecasts
- December 2023: 5.55% and 5.54% previous data.
- March 2024: 5.63% vs 5.58% previous data.
- June 2024: 5.67% vs 5.59% previous data.
- September 2024 (Peak): 5.69% vs 5.57% previous data.
- December 2024: 5.66% vs. 5.5% previous data.
- December 2025: 4.95% vs 4.51% previous data.
- December 2026: 3.55%.
He The RBNZ revised its rate forecasts upwards in the November monetary policy statement. Source: RBNZ
The RBNZ’s new rate forecast does not foresee rate cuts until mid-2025. Although inflation is expected to reach the 1-3% target in the third quarter of 2024, the growth projections do not suggest that the New Zealand economy will face a slowdown, as in previous projections.
In addition to the aggressive revision to rate forecasts, the New Zealand dollar received a boost from Governor Orr during a post-meeting press conference. Orr said the discussion at today’s meeting was about raising interest rates as central bankers were “nervous” about inflation remaining above the RBNZ’s target from early 2021. This shows that rate hikes are off the table in New Zealand and that an increase is possible. Next RBNZ meeting (February 28, 2024). However, money markets are not buying this detail as the OIS market sees only a 5% chance of a 25 basis point rate hike in February.
Source: Bloomberg Finance LP
This material is a promotional communication as understood in Article 24.3 of 2014/65/EU (MiFID II). This promotional communication is not an investment recommendation or information, market abuse and representation regulation (EU) 2016/958 Regulation (EU) no. 596/2014 in the sense of Regulation (EU) No 596/2014 is not information recommending or recommending an investment strategy. completed, or not included in the scope of investment advice included in the Stock Markets and Investment Services Act (Article 125.1 g). This advertising communication, prepared with the greatest diligence, transparency and objectivity, presents the facts known to the author at the time of its creation and is exempt from analytical elements. This promotional communication has been prepared without taking into account the client’s needs or personal financial situation and does not represent an investment strategy or recommendation. If the promotional communication contains information about the performance or behavior of the financial instrument to which it refers, it does not constitute any guarantee or prediction of future results. Past performance is not necessarily indicative of future results and anyone acting on this information does so at their own risk. CFDs are complex instruments and associated with the risk of losing money quickly due to leverage. 78% of retail investor accounts lose money trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can take the risk of losing your money.
“Typical beer advocate. Future teen idol. Unapologetic tv practitioner. Music trailblazer.”