28 Jan 2016
RBNZ: Expecting two cuts this year - HSBC
FXStreet (Bali) - Following today's dovish RBNZ policy statement, Paul Bloxham, Chief Economist, Australia & New Zealand, at HSBC, is expecting two cuts this year by the RBNZ, one in Q2 and one in Q3.
Key Quotes
"The RBNZ kept its cash rate on hold at 2.50% today, as expected. The most significant change to the short accompanying statement was a stronger easing bias; the RBNZ clearly now sees a greater chance of further rate cuts."
"In December they said they expected to hit the inflation target with rates at current settings; now “some further policy easing may be required over the coming year to ensure” inflation gets back to 2%. The RBNZ will continue to 'look through' the impact of low oil prices on inflation, and pointed out today that (some measures of) underlying inflation, as well as inflation expectations, are more consistent with the inflation target."
"However, we believe that disinflation is being driven by much more than just oil prices and lower interest rates will be necessary for inflation to reach 2% on a sustained basis. We are expecting two cuts this year, one in Q2 and one in Q3."
Key Quotes
"The RBNZ kept its cash rate on hold at 2.50% today, as expected. The most significant change to the short accompanying statement was a stronger easing bias; the RBNZ clearly now sees a greater chance of further rate cuts."
"In December they said they expected to hit the inflation target with rates at current settings; now “some further policy easing may be required over the coming year to ensure” inflation gets back to 2%. The RBNZ will continue to 'look through' the impact of low oil prices on inflation, and pointed out today that (some measures of) underlying inflation, as well as inflation expectations, are more consistent with the inflation target."
"However, we believe that disinflation is being driven by much more than just oil prices and lower interest rates will be necessary for inflation to reach 2% on a sustained basis. We are expecting two cuts this year, one in Q2 and one in Q3."