Analysts at UOB Group explained that the Reserve Bank of New Zealand (RBNZ) left its Official Cash Rate unchanged at 1.75%, as widely expected.
“In its statement, it said that monetary policy will remain accommodative for considerable period and developments since February on balance considered to be neutral for monetary policy stance. It warned that numerous uncertainties remain and policy may need to adjust accordingly.”
“New Zealand house price inflation has moderated further, and RBNZ noted the moderation is projected to continue. RBNZ Governor Graeme in his post-decision press conference noted that the RBNZ is neutral on monetary policy, expect OCR to remain at the current level for “foreseeable future”. He also explained that the RBNZ does not “hold that view” of inflation pressures ramping up quickly and “haven’t seen an acceleration of wage inflation” in NZ.”
“He iterated that the RBNZ is not seeing a building in inflation pressures that some other commentators are seeing. The lack of inflation pressure main reason for keeping a neutral stance. He also assured that even though there may be some increase in house price inflation “but nothing like we’ve seen in the past.”