By Chris Shaw<\/p>\n
In a move in-line with market expectations the Reserve Bank of New Zealand (RBNZ) left official interest rates unchanged at 8.25% yesterday, an outcome that reflected the current uncertainty in global economic conditions as much as the data available to the bank.<\/p>\n
UBS suggests to date the RBNZ has successfully walked the line in policy terms but with the outlook for growth to disappoint in the medium-term it expects there will be some wriggle room for rate cuts in the medium-term.<\/p>\n
GSJB Were agrees, though its timetable calls for rates to begin to come down around the middle of 2008. Commonwealth Bank’s New Zealand economist Chris Tennent-Brown suggests it will be late in 2008 before rates can be eased, as he sees inflation as heading back towards the top of the RBNZ’s target band of 1-3%.<\/p>\n
Early in 2008 is the timetable for rate cuts to begin according to TD Securities senior strategist Joshua Williamson, a scenario he suggests would be helped by weaker CPI data in coming months. Looking at the cycle longer-term Williamson suggests rates could eventually come down by as much as 2%.<\/p>\n
Macquarie agrees the latest economic data show some signs of a slowing in the domestic economy, particularly as recent rate increases have begun to bite in terms of slowing consumer spending levels.<\/p>\n
The broker suggests this is being largely offset though by weakness in the New Zealand dollar as a result of the recent volatility in global markets, which is boosting the gains being achieved by strong prices increases in soft commodities.<\/p>\n
As a result the broker notes inflationary pressures remain, so it expects the CPI to remain at the top of the target band through to the end of 2009. As a result Macquarie suggests monetary policy will remain on hold for some time, with clear signs of an easing in inflationary pressures to be needed before rates come down.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Reserve Bank of New Zealand left official interest rates unchanged yesterday and economists suggest early next year is the soonest the market can expect a rate cut.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[21],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/53417"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=53417"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/53417\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=53417"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=53417"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=53417"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}