RBNZ: Holding the line – Nomura

The RBNZ today announced an unchanged cash rate, as was uniformly expected, and delivered a relatively balanced and open press release, notes Andrew Ticehurst, Research Analyst at Nomura.

Key Quotes

“NZD and NZ rates were largely unchanged on the news. We continue to think this gives incoming governor Adrian Orr, who takes the helm on 27 March, complete flexibility. We also continue to pencil-in two 25bp rate hikes, in the second-half of 2019. However given that the incoming governor is something of an “unknown quantity”, potential changes to the Policy Target Agreement and the review of the Reserve Bank Act, uncertainty is higher than usual and we will continue to monitor developments closely over the coming month.”