The Reserve Bank of New Zealand monetary policy meeting is this week

  • Announcement due Thursday 11 May (local NZ time)
  • Announcement due 2100GMT on May 10
  • The current official cash rate is 1.75%
  • As well as the OCR announcement there will be an accompanying Monetary Policy Statement & media conference

Preview from BNZ:

  • There is next to zero chance of the RBNZ moving the OCR at this meeting
  • All the interest will be in how the Bank accommodates the unexpected economic information such as much higher CPI inflation and a meaningfully lower NZD. The latter, importantly, occurring in spite of general improvement in NZ's major export commodity prices and thus adding to the inflation outlook
  • We think those developments outweigh the likes of slower economic growth and higher retail interest rates on the inflation outlook
  • It all should be enough to lessen the chance of a cut in the Bank's mind and bring forward the projected tightening from the very late 2019 zone that the RBNZ previously projected
  • Look for the former in the Bank's language and the latter in the new set of forecasts. However, the Bank is unlikely to move as far as what the market currently has priced.
  • The Bank may well choose to look through a lot of the recent data if it still considers the world to be as uncertain as it did in March.

BNZ expects an OCR hike in February 2018