RBNZ calls time on cuts…for the time being – BNZ

By FXStreet FXStreet (Bali) – RBNZ left the OCR unchanged at 2.75%, keeping its easing bias, notes Craig Ebert, Economist at BNZ, adding that a final 25bp cut in December is expected, but much now depends on the data.

Key Quotes

“Given recent history, we didn’t quite trust the Reserve Bank to resist pervasive pressure to cut its cash rate. We should have. To be clear, we think the Bank is doing the right thing here, in steadying its Official Cash Rate at 2.75%, after a string of reductions. This is even though we were 51/49 on the side of a final tweak lower for today’s meeting. We thought the Bank should hold fire today, but weren’t quite convinced it would.”

“Nor can we take any umbrage at the Bank’s only-moderate easing bias, which we infer from its commentary. Our take is that the RBNZ is doing its best to buy some more time, before potentially having to cut further. It’s still, at heart, a reluctant cutter, in our view, but is keeping its options open nonetheless.”

“Yes, there is the phrase in the last paragraph of RBNZ text that “To ensure that future average CPI inflation settles near the …read more

Source:: FX Street