Reserve Bank of New Zealand interest rate decision a very close call – why they could cut

ING previewing the Reserve Bank of New Zealand meeting on Wednesday 14 August, this the bottom line:

• It is a very close call, and consensus is split between a 25bp cut and a hold by the Reserve Bank of New Zealand on 14 August.
• However, we are inclined to think the RBNZ may still prefer to wait for the Fed to move first amid lingering non-tradable inflation concerns, and perhaps deliver a 50bp cut in October.
• The alternative scenario is probably a “hawkish” cut

I thought this was a good point, and may swing the Bank to cut:

• Some analysts see the fact that the next RBNZ meeting is only on 9 October as an incentive to start cutting now, before the Fed delivers its largely anticipated first cut in September. Should this be the case, the RBNZ may however be quite cautious in signalling more cuts ahead. The new rate projections may signal somewhere between one and two more cuts by year-end.

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Statement to be delivered at 2pm New Zealand time on Wednesday 14 August

• which is 0200 GMT
• and 2200 US Eastern time on Tuesday

Earlier:

• New Zealand – RBNZ shadow board split on Reserve Bank interest rate cut

• RBNZ monetary policy meeting – Reuters poll is not clear cut, 19 say hold, 12 say 25bp cut
• ANZ forecast the RBNZ to remain on hold next week, signal a rate cut later in the year
• NZD traders – Westpac forecasts the RBNZ to cut by 25bps in October and November 2024

This article was written by Eamonn Sheridan at www.forexlive.com.