The Reserve Bank of New Zealand is largely expected to keep its policy rate unchanged at its meeting on Wednesday, May 22, 2024.
The statement is due by 2 p.m. New Zealand time (03:00 GMT, 22:00 US Eastern Time).
The New Zealand Institute of Economic Research (NZIER) Shadow Monetary Policy Council has released what it says should happen. Comments (in brief) on the reasoning:
- recommends that the RBNZ maintain the official rate (OCR) at 5.50%
- Although there is consensus among Shadow Board members that annual CPI inflation continues to slow, the persistence of high domestic inflation remains a concern. For this reason, the Shadow Board believes that the OCR should remain unchanged in May. One member also highlighted that the RBNZ should continue the OCR in May, given the uncertainty surrounding the government’s budget.
Reserve Bank of New Zealand policy meeting preview – (still) hawkish continuation expected
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The New Zealand Institute of Economic Research (NZIER) operates a “shadow committee” of analysts. The Shadow Board is independent of the RBNZ and does not represent what the RBNZ will do, but rather what it believes the RBNZ should do. That is, the Shadows do not preview what they think will happen, but what they think should happen.
As for this week’s meeting, the Shadows’ view is the same as the market consensus, a decision to hold at 5.5%.
- Shadow Board members agreed that inflation was slowing, but there was uncertainty over whether the pace of this easing would be sufficient to bring annual CPI inflation back within the inflation target range over the next year. the year to come.
- The general view was that it would be prudent for the central bank to wait to assess how the economy fares over the coming months, given the uncertainty surrounding the global growth outlook and the priorities of the new government.
RBNZ Orr
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