NZD traders – heads up for the RBNZ policy meeting Wednesday NZ time

The Reserve Bank of New Zealand releases its policy decision at 2pm NZ time

  • 0100 GMT
  • will be accompanied by its latest Monetary Policy Statement 9with forecast updates etc)
  • Governor Orr press conference follows at 3pm / 0200 GMT

Earlier previews:

the RBNZ will meet for the first time since raising rates by 25 basis points on November 24th to 0.75%

The market is placing about 30% odds on a 50-pointer, which seems fair

Via BNZ (in very brief):

  • For this week’s meeting, our central view is that the RBNZ will increase its cash rate 25 basis points, signal a higher terminal cash rate, and have an even firmer increase in rates through calendar 2022 than was published in the November 2021 MPS. For the most part, this will “meet the market”.

ASB (in very brief):

  • We expect the RBNZ to deliver a third successive 25bps lift in the Official Cash Rate (OCR) next Wednesday. Inflationary pressures have continued to build faster than the RBNZ had anticipated at its last policy decision three months ago. The RBNZ’s forecasts are likely to show the OCR peaking around 3%, up from 2.6% in November’s published forecasts. Although the interest rate market has priced in some chance of a 50bp increase (as it did ahead of the first two 25bp increases), we expect the RBNZ will again be measured.

KiwiBank (in very brief):

  • The RBNZ is set to deliver a 25bp hike on Wednesday, at its first meeting of the year. The cash rate will likely be lifted to 1.00%, and will be the third hike in the tightening cycle. The mass stimulus delivered to fight covid is no longer needed. More harm than good will come to the economy if it’s not steadily withdrawn. We see the RBNZ hiking the cash rate at each meeting in 2022 to see the OCR at 2.50%, before pausing to take stock.

There will be further hikes down the track:

rbnz meetings 2022


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