NZ Central Bank seen Holding Rates but Not for too Long


RBNZ to hold rates at 0.25 poll

RBNZ to acknowledge stronger starting point ANZ

Markets pricing rate hike in November

WELLINGTON, July 12 Reuters New Zealands central bank will leave monetary policy unchanged this week but could start to raise rates later this year, according to a Reuters poll, following recent data that showed rising inflationary pressures and a tightening labour market.

All economists polled by Reuters expect the Reserve Bank of New Zealand RBNZ to hold the official cash rate OCR on Wednesday at a record low of 0.25, where it has been since a pandemicdriven cut in March last year.

But at least a quarter of them now expect a rate hike later this year, a change in sentiment sparked a business survey last week that indicated a sharp improvement in outlook while also flagging rising capacity pressures and inflation.

ANZ Bank, which moved forward its forecast for a rate hike by a year to November, said RBNZ is likely to acknowledge the stronger economic conditions, and thereby set the scene for kicking off a cycle of rate rises this year.

The market is already pricing in almost 90 odds of a hike by November, and one and a half hikes by February, ANZ Chief Economist Sharon Zollner said in a note.

We have been emphasising for some time that the risks were becoming strongly skewed towards liftoff this year. Now that the market is there, its more likely, Zollner said.

The Reserve Bank of New Zealand RBNZ held interest rates in May but hinted at a…

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