Bloomberg with a piece on the surprise decision from the Reserve Bank of New Zealand.
It quotes analysts who forecast the RBNZ would remain on hold, for example:
Stephen Toplis, head of research at BNZ:
- "This statement is not consistent with what Graeme Wheeler said in his February speech, and his February speech was not consistent with what they said in the December monetary policy statement,"
- "We're really struggling to know what process the bank is using to deliver its outcomes."
I reckon they are very fair points.
But, on the other side of the argument ...
Kiwibank senior economist Zoe Wallis, who correctly forecast today's move, said two key things had changed since Wheeler's speech: downside risks to the global economic outlook had increased, and a measure of inflation expectations dropped to a 22-year low.
There is more at the article, here.
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What it doesn't mention is potential pressure applied to Wheeler from politicians, like finance minister English, who has been saying for a long while that the RBNZ should cut as inflation is so low. I reckon that was a factor in today's decision.
