28 Jan 2016
NZD: Policy easing may be required over the coming year – Deutsche Bank
FXStreet (Delhi) – Research Team at Deutsche Bank, notes that the RBNZ left its cash rate at 2.5%, but added that “some further policy easing may be required over the coming year”.
Key Quotes
“In its December statement the Bank had said that “we expect to achieve [the inflation target] at current interest rate settings, although the Bank will reduce rates if circumstances warrant.” The conclusion has to be that the Bank has become more dovish, reflecting “uncertainty about the strength of the global economy” and because “headline inflation [will] take longer to reach the target range that previously expected.”
In other news, Fonterra announced that it had cut the forecast price for farmgate milk to NZ$4.15 Kgms, from $4.60 previously.”
Key Quotes
“In its December statement the Bank had said that “we expect to achieve [the inflation target] at current interest rate settings, although the Bank will reduce rates if circumstances warrant.” The conclusion has to be that the Bank has become more dovish, reflecting “uncertainty about the strength of the global economy” and because “headline inflation [will] take longer to reach the target range that previously expected.”
In other news, Fonterra announced that it had cut the forecast price for farmgate milk to NZ$4.15 Kgms, from $4.60 previously.”