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Actual | Forecast | Previous | Revised Form | |
| 2.50% | 2.50% | 2.50% | N/A | ||
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Provided by: Reserve Bank of New Zealand
From the Release: "Annual CPI inflation is currently at 2 percent, and is expected to track within the target range over the medium term. In the short term, implementation of the amended Emissions Trading Scheme and increases in ACC charges will push CPI inflation toward the top of the target range. “Higher bank funding costs have reduced the level of stimulus that would normally be associated with any given level of the OCR. We expect these costs to persist over the projection reducing the extent of future increases in the OCR. Fiscal consolidation would also help reduce the work that monetary policy might otherwise need to do. “We continue to expect to begin removing policy stimulus around the middle of 2010." |
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| 1/28 | 3/11 | 4/29 | 6/10 | 7/29 | 9/9 | 10/28 | 12/9 | 1/27 | 3/10 | ||
| Actual | 3.50% | 3.00% | 2.50% | 2.5% | 2.50% | 2.50% | 2.50% | 2.50% | 2.50% | 2.50% | |
| Forecast | 4.00% | 3.00% | 2.50% | 2.5% | 2.50% | 2.50% | 2.50% | 2.50% | 2.50% | 2.50% | |
| Previous | 5.00% | 3.50% | 3.00% | 2.5% | 2.50% | 2.50% | 2.50% | 2.50% | 2.50% | 2.50% | |
| Revised From | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |
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Actual | Forecast | Previous | Revised Form | |
| 2.50% | 2.50% | 2.50% | N/A | ||
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Provided by: Reserve Bank of New Zealand
From the Release (Reserve Bank Governor Alan Bollard): “The outlook for the New Zealand economy remains consistent with the projections underlying the December Monetary Policy Statement (PDF). Global activity continues to recover, helping push New Zealand’s export commodity prices higher. Economic growth is most apparent in China, Australia, and emerging Asia. However, sustained growth throughout our trading partners is not assured, with many still facing impaired financial sectors and overall activity still reliant on policy support. Similarly, the New Zealand economy continues to recover. Policy stimulus and improving export earnings have seen a pickup in household spending. That said, households remain cautious, with credit growth subdued. Business spending remains weak. Annual CPI inflation is currently at the centre of the target band, and is expected to track comfortably within the band over the medium term. The economy is being assisted by both monetary and fiscal policy support. As growth becomes self sustaining, fiscal consolidation would help reduce the work that monetary policy might otherwise need to do. If the economy continues to recover in line with our December projections, we would expect to begin removing policy stimulus around the middle of 2010.” |
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Actual | Forecast | Previous | Revised Form | |
| 2.50% | 2.50% | 2.50% | N/A | ||
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Provided by: Reserve Bank of New Zealand
The Kiwi rose in the aftermath of the Reserve Bank of New Zealand interest rate statement. While they kept rates at 2.5% as expected, the statement said that the central bank will remove monetary stimulus around the middle of 2010 if the economy continues to recover. From the Release: "In New Zealand, the economy continues to recover, reflecting improved world growth, higher export commodity prices, increased government spending and housing strength. A key uncertainty is the extent to which higher house prices are eventually reflected in increased consumer spending. At this point credit growth remains subdued suggesting households are being relatively cautious... If the economy continues to recover, conditions may support beginning to remove monetary stimulus around the middle of 2010. Recent tightening in financial conditions, driven by a higher exchange rate, increased long-term interest rates and a wider gap between the OCR and bank funding costs, reduces the need for more immediate action." |
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Actual | Forecast | Previous | Revised Form | |
| 2.50% | 2.50% | 2.50% | N/A | ||
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Provided by: Reserve Bank of New Zealand
From the Release: "The forecast recovery in economic activity is based on fiscal and monetary policy continuing to provide substantial support to the economy. We think such support remains appropriate. Further ahead, removing some of the current fiscal stimulus is likely to reduce the work that monetary policy will otherwise need to do. “In contrast to current market pricing, we see no urgency to begin withdrawing monetary policy stimulus, and we expect to keep the OCR at the current level until the second half of 2010.” |
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Actual | Forecast | Previous | Revised Form | |
| 2.50% | 2.50% | 2.50% | N/A | ||
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Provided by: Reserve Bank of New Zealand
Previous Release: Statement |
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Actual | Forecast | Previous | Revised Form | |
| 2.50% | 2.50% | 2.50% | N/A | ||
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Provided by: Reserve Bank of New Zealand
From the Release: "Despite signs of a leveling off in economic activity, the economy remains weak. We continue to expect to see a patchy recovery get underway toward the end of the year, but it will be some time before growth returns to healthy levels. The outlook remains highly uncertain. New Zealand’s merchandise exports are heavily weighted to soft commodities. As a result, New Zealand has not benefited to any significant extent from the rebound that has occurred recently in global hard commodity prices. We consider it appropriate to continue to provide substantial monetary policy stimulus to the economy. The OCR could still move modestly lower over the coming quarters. We continue to expect to keep the OCR at or below the current level through until the latter part of 2010.”
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Actual | Forecast | Previous | Revised Form | |
| 2.5% | 2.5% | 2.5% | N/A | ||
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Provided by: Reserve Bank of New Zealand
From the Release: "The economic outlook remains weak both in New Zealand and in other countries. However, there are signs that international economic activity is stabilising, and international financial conditions are improving. We expect the New Zealand economy to begin growing again toward the end of this year but the recovery is likely to be slow and fragile. Many key economic indicators such as unemployment are projected to keep deteriorating well into 2010. “Overall, recent developments point to lower inflationary pressure than previously projected. Annual CPI inflation is likely to fall temporarily below the bottom of the target band later this year, but we expect it to return to inside the band by early 2010 and remain comfortably there over the remainder of the projection. “We have cut the OCR by a large amount over the year. We expect the effects to pass through to more borrowers over coming quarters as existing fixed-rate mortgages come up for re-pricing. Although rising longer-term interest rates overseas are placing upward pressure on longer-term lending rates here, there is room for further reductions in shorter-term lending rates. “The low OCR and stimulatory fiscal policy are the main sources of support to the New Zealand economy at present. It is likely to be some time before the recovery becomes self-sustaining and monetary policy support can be withdrawn. “We therefore consider it appropriate to continue to provide substantial monetary policy stimulus to the economy. The OCR could still move modestly lower over the coming quarters. As we said at the time of the April OCR decision, we expect to keep the OCR at or below the current level through until the latter part of 2010.” |
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Actual | Forecast | Previous | Revised Form | |
| 2.50% | 2.50% | 3.00% | N/A | ||
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Provided by: Reserve Bank of New Zealand
From the Release: "While the New Zealand economy has not experienced the same extreme falls in economic activity as seen in a number of our trading partners, it remains weak. Business sentiment is low, investment has been curtailed and employment reduced. “We expect the large decline in the OCR over the past year to pass through to more borrowers over coming quarters as existing fixed-rate mortgages come up for re-pricing. This, together with the stimulus from fiscal policy, will act to support the New Zealand economy and eventually see activity trough and pick up thereafter. However, the scale of the global financial crisis and domestic adjustments underway are such that it is likely to be some time before economic activity returns to robust and healthy levels. “We consider it appropriate to provide further policy stimulus to the economy. We expect to keep the OCR at or below the current level through until the latter part of 2010. The OCR could still move modestly lower over the coming quarters.”
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Actual | Forecast | Previous | Revised Form | |
| 3.00% | 3.00% | 3.50% | N/A | ||
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Provided by: Reserve Bank of New Zealand
From the Release (Reserve Bank Governor Alan Bollard): "The world economy deteriorated very rapidly late last year, amid ongoing losses and extreme volatility in international financial markets. While monetary and fiscal policy responses in many countries have been substantial we still expect the adverse economic forces generated by the crisis to remain dominant throughout 2009. The timing and extent of global recovery remain highly uncertain. In New Zealand, the impact of difficult trading conditions is showing through clearly in reduced export revenues, weak business sentiment, and sharply curtailed investment and employment... The OCR has now been reduced 525 basis points in little more than six months, taking interest rates to very stimulatory levels... In addition to the substantial change in monetary policy settings, there has been a large amount of stimulus from fiscal policy. These policy changes, together with the sizeable exchange rate depreciation, will act to support the New Zealand economy: therefore, we expect to see activity troughing in the middle of this year and then gradually picking up thereafter... As economic activity troughs, we expect the rapid easing of monetary policy to slow. Any future cuts will be much smaller than observed recently. We do not expect to see in New Zealand the near-zero policy rates of some countries."
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Actual | Forecast | Previous | Revised Form | |
| 3.50% | 4.00% | 5.00% | N/A | ||
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Provided by: Reserve Bank of New Zealand
From the Release: "Globally, there has been considerable policy stimulus put in place and we expect this to help bring about a recovery in growth over time. However, there remains huge uncertainty about the timing and strength of a recovery. The extent of the decline in global growth prospects and the ongoing uncertainty has played a large part in today’s decision. We now expect the impact on New Zealand of these developments to be greater than we did in December, as a result of a more negative outlook for the terms of trade and exports, and tighter credit conditions. Today’s decision brings the cumulative reduction in the OCR since July 2008 to 4.75 percentage points. Lower interest rates will have a positive impact on growth, alongside a lower exchange rate and fiscal stimulus, provided firms and households do not unnecessarily contract their spending. To ensure the response we are seeking, we expect financial institutions to play their part in the economic adjustment process by passing on lower wholesale interest rates to their customers. This will help New Zealand respond flexibly."
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