Reserve Bank of New Zealand monetary policy decision for April 2024.
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The Committee believes that maintaining the OCR at a restrictive level for an extended period will return consumer price inflation to the target range of 1 to 3 percent this calendar year.
i.e. higher for longer!!!
more soon
More:
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New Zealand’s economy continues to perform as predicted by Monetary Policy Committee
- A restrictive monetary policy remains necessary to further reduce pressures on capacity and inflation.
- Economic growth in New Zealand remains weak
Excerpt from the meeting minutes:
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Members agree that they remain convinced that monetary policy restrains demand.
- Contractive monetary policy helps ease capacity pressures to ensure that inflation returns to its target.
- A further reduction in pressure on capacity is expected, which would encourage a continued decline in inflation.
- Members agree that they remain convinced that monetary policy restrains demand.
- Business confidence indicators have declined and their own expectations for business and investment have weakened.
- Short-term corporate pricing intentions have declined but remain elevated, partly reflecting an uptick in realized and expected costs.
- Continued strength in net migration supports overall consumer spending and rising housing costs
- The committee agreed that interest rates must remain at a restrictive level for an extended period.
- Members agree that the balance of risks has changed little since the February meeting
- Members agree that there remains limited tolerance for extending the time needed to achieve the inflation target as long as inflation remains outside the target range and inflation expectations and intentions pricing remains high.
- Members agree that persistent services inflation remains a risk and that goods price inflation remains high.
- Continuing restrictive monetary policy amid weak global growth could lead to inflation falling faster than expected
NZD/USD rose on announcement
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Context of this:
- Preview RBNZ monetary policy decision expected today, expected on hold
- Preview – Reserve Bank of New Zealand monetary policy decision due today, but expected to be suspended
- RBNZ meeting: Shadow Board recommends maintaining official cash rate (OCR) at 5.5%
This article was written by Eamonn Sheridan at www.forexlive.com.
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