31 Oct 2013
Flash: RBNZ to begin hiking rates in April next year - Westpac
FXstreet.com (Barcelona) - After today's OCR Review by the RBNZ, Westpac now expects the Central Bank to begin raising the interest rate in April next year (previously March).
Key Quotes
"RBNZ repeated its guidance that the OCR will need to go up next year. Compared to previous missives, the RBNZ was more concerned with the high exchange rate."
"As we anticipated, this concern was expressed via a sentence pointing out that the trajectory of the OCR will depend on the exchange rate: "Sustained strength in the exchange rate that leads to lower inflationary pressure would provide the Bank with greater flexibility as to the timing and magnitude of future increases in the OCR."
"Also as expected, the RBNZ appears to have upgraded its near-term GDP forecast, in line with the flow of recent data. All of this culminated in a final paragraph to the Review that was virtually unchanged from the September MPS."
"As we foreshadowed last week, we are altering our own OCR forecast. We now expect the RBNZ will begin hiking the OCR in April next year (previously March)."
"We still believe the economy is going from strength to strength. But the exchange rate is now uncomfortably high, and we expect the TWI will be above 78 next March. At those levels, we doubt that the RBNZ will be prompted into hiking the OCR early."
Key Quotes
"RBNZ repeated its guidance that the OCR will need to go up next year. Compared to previous missives, the RBNZ was more concerned with the high exchange rate."
"As we anticipated, this concern was expressed via a sentence pointing out that the trajectory of the OCR will depend on the exchange rate: "Sustained strength in the exchange rate that leads to lower inflationary pressure would provide the Bank with greater flexibility as to the timing and magnitude of future increases in the OCR."
"Also as expected, the RBNZ appears to have upgraded its near-term GDP forecast, in line with the flow of recent data. All of this culminated in a final paragraph to the Review that was virtually unchanged from the September MPS."
"As we foreshadowed last week, we are altering our own OCR forecast. We now expect the RBNZ will begin hiking the OCR in April next year (previously March)."
"We still believe the economy is going from strength to strength. But the exchange rate is now uncomfortably high, and we expect the TWI will be above 78 next March. At those levels, we doubt that the RBNZ will be prompted into hiking the OCR early."