As expected, the Monetary Policy Committee of the Reserve Bank of New Zealand, RBNZ, decided to raise the official interest rates OCR by 0.50% to 2.50% from 2% in its meeting this morning, Wednesday, in the Asian session, in an increase for the third time in a row in the same pattern and the fifth in general since the start of monetary tightening from the bank.
The issued statement indicated that the committee is determined to be committed to ensuring the return of consumer price inflation to the target range of 1-3%, and that it is satisfied that the expected path to raise interest rates until the moment is consistent with the expectations of May and consistent with achieving the inflation and employment goals without causing instability in production or exchange rate .
The expectations of the committee and the markets are at 4% levels for interest rates by the end of the year, as the committee agreed to maintain its approach of raising interest rates quickly to ensure that inflation levels return to the bank’s target range.
The reaction of the New Zealand dollar was weak, with a decline of about 30 pips against the US dollar, because the decision was expected in the markets, and the statement did not come with anything new, as the pair tested 1.6100 levels before rising and is now trading at 1.6122 levels.
02/11/2024
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