RBNZ will announce OCR decision tomorrow
Economists have released their official cash rate (OCR) forecasts as the date for the Reserve Bank of New Zealand’s (RBNZ) OCR announcement approaches.
In April, economists’ forecasts came true when the RBNZ decided to keep the OCR at its current level of 0.25%. Now, economists have once again released their predictions before the central bank releases its quarterly Monetary Policy Statements (MPS) and OCR decisions tomorrow.
TMM’s preview survey revealed that all economists interviewed expect the RBNZ to keep the OCR at its current level of 0.25%. They were also on the lookout for any mention of interest rate hikes due to inflationary pressure.
ANZ chief economist Sharon Zollner expects the RBNZ to acknowledge substantial data, but “tightening is far off.” She told TMM that ANZ economists forecast the first rate hike in August 2022, with steady increases up to 1.25% by the end of 2023.
BNZ economists and independent economist Tony Alexander expects a less dovish economic commentary amid recent economic data.
Kiwibank chief economist Jarrod Kerr aired the same thoughts, expecting “a de-emphasis on the RBNZ’s willingness to cut the OCR further” and more discussion on the criteria that would guide it in any decision to increase. However, he clarified that he does not expect an increase this year.
“Although the OCR will be left unchanged, there’s much the RBNZ must update. The economic outlook has clearly improved, despite some turbulence over the summer months,” Kerr added, as reported by Good Returns.
“Downside risks have receded, and upside risks are rising. We expect inflation to spike to 2.5% next quarter, and rising costs are a particular pain point for many Kiwi firms. We expect to see a more detailed discussion around the cost-push inflationary wave, and whether or not the RBNZ deems the surge to be transitory.”
Meanwhile, Economics NZ owner Donal Curtin advised the central bank to analyse how much of the current inflationary pressures are temporary and whether they would continue to rise in the long term.
