Breaking: RBNZ hikes OCR to 2% as expected but sees higher future rates to prior outlooks, sending kiwi higher
Developing story
The Reserve Bank of New Zealand has hiked the Official Cash Rate by 50 bps to 2% and the markets are now on the lookout for the pace of future tightening for which the Monetary Policy Statement, (MPS), will potentially shed some light.
''With fears of a hard landing at the core of what’s eating away at risk sentiment, as we’ve been saying for a while, if the RBNZ can strike the right balance between “we’ve got this” on inflation while signalling that it is cognisant of recession risks (not an easy job) while also preserving optionality, that’d likely be positive for the Kiwi,'' analysts at ANZ Bank said
RBNZ rate decision & MPS
- RBNZ Raises The Official Cash Rate 50 Basis Points To 2.00% As Expected
- RBNZ SEES OFFICIAL CASH RATE AT 2.68% IN SEPTEMBER 2022 (PVS 1.89%)
- 24-May-2022 20:00:01 - RBNZ SEES OFFICIAL CASH RATE AT 3.88% IN JUNE 2023 (PVS 2.84%)
- 24-May-2022 20:00:01 - RBNZ SEES TWI NZD AT AROUND 71.8% IN JUNE 2023 (PVS 71.6%)
- 24-May-2022 20:00:01 - RBNZ SEES ANNUAL CPI 3.5% BY JUNE 2023 (PVS 2.6%)
- 24-May-2022 20:00:01 - RBNZ SEES OFFICIAL CASH RATE AT 3.95% IN SEPTEMBER 2023 (PVS 3.1%)
- 24-May-2022 20:00:01 - RBNZ SEES OFFICIAL CASH RATE AT 3.51% IN JUNE 2025
More to come...
NZD/USD update
As per the pre-RBNZ technical analysis, NZD/USD Price Analysis: Bulls seeking a higher correction on weekly chart, the bears were in the process of mitigating some of the price imbalance the 4-hour chart as follows:
But the decision has sent the kiwi higher to take on the resistance as follows:
''Interest rate decisions will likely become more difficult over the second half of the year, especially as evidence of cooling demand starts to mount. As such, we anticipate they will return to more normal 25bp hikes as they assess how previous interest rate hikes are transmitting through the economy,'' analysts at ANZ Bank argued.
About the RBNZ Interest Rate Decision
RBNZ Interest Rate Decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the NZD.