RBNZ Forecast Keeps Policy Rates Unchanged In Short-term

The central bank of New Zealand is presumed to keep the interest rates unchanged this week for the next term as policymakers wait for an increase in inflation and higher growth numbers and determine its sustainability.

Meanwhile, economists will see scrutinize the monetary policy on Thursday if the trend changes from being dovish since August, as it decided to sustain the interest rates at a record low until 2020 since the current progress did not meet expectations.

The official cash rate (OCR) of the Reserve Bank of New Zealand will be maintained since November 2016 to be at 1.75 percent based on the Survey from Reuters of 16 economists on the final policy review for the year.

However, two economists anticipate a rate hike in the July quarter of 2019 and four of them assumed an increase in the last quarter while the rest of the months expected not to change in 2019.

The latest announcement from the RBNZ Governor Adrian Orr for the month of September was not too negative at the August meeting but said that an accommodating monetary policy is necessary to raise inflation.

RBNZ is taking solace from the unexpected solid growth for the second quarter and continued on the next three months, close to the midpoint target of 2.0 percent according to analysts while some consider this to be misleading.