RBNZ preview – most likely cut the cash rate by 50bps next week, and again in November

Analysts at KiwiBank title their note:

The RBNZ will most likely cut 50bps next week, and again in November. It’s the easiest thing to do.

KiwiBank have been well ahead of the curve on projecting 50bpo rate cuts in October and November from the Reserve Bank of New Zealand.

From their latest:

• now that a 50bp cut is consensus amongst economists and market traders, it’s actually harder NOT to deliver a 50bp cut
• A 50bp cut next week, with a signal of another in November, would only appease traders and keep wholesale rates where they are.
  If the RBNZ is serious about reducing the restrictiveness (not providing stimulus) of monetary policy, the market has opened them up for larger moves. Overly restrictive monetary policy has inflicted much pain and tamed the inflation beast. Households and businesses are struggling. It’s been two years of recession. Interest rate relief is required, now. And long policy lags must be taken into account.

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Earlier previews:

• ANZ say the path of least resistance for the RBNZ is a 50bp interest rate cut next week

• More on BNZ forecasting a 50bp interest rate cut next week from the RBNZ

• Here is another forecast for a 50bp interest rate cut from the RBNZ next week
• HSBC expect a 50bp interest rate cut from the Reserve Bank of New Zealand next week

• 100bp of rate cuts coming up from the Reserve Bank of New Zealand, beginning next week

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