PREVIOUS TRADING DAY EVENTS 12 July 2023

The Reserve Bank of New Zealand RBNZ decided to keep the Official Cash Rate OCR unchanged at 5.5 yesterday. The decision was made after assessing the data, suggesting that the economy has weakened significantly and inflation has slowed down. This was in line with the expectations. 

Interest rates are constraining spending and inflation pressure as anticipated and required, the RBNZ said in a statement. The Committee is confident that with interest rates remaining at a restrictive level for some time, consumer price inflation will return to within its target range.

We still see the RBNZ as done with tightening, though dont expect a lower OCR until May next year, said Nick Tuffley, chief economist at ASB Bank in Auckland. From here the RBNZ will keep watching the data to confirm whether or not inflation is likely to decline in line with its expectations.

Inflation is too high but is expected to continue to decline back to the target range by the second half of 2024, the RBNZ said today.

Recent indicators suggest that growth is likely to remain weak in the near term, the RBNZ said. Consumer spending growth has eased and residential construction activity has declined.

Source

httpswww.bloomberg.comnewsarticles20230712newzealandkeepsratesonholdasweakeconomydampsinflation

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