Westpac Bulletin: Sticking to the plan
Highlights of this RBNZ OCR preview:
- The March OCR cut was aimed at lessening the economic impact of the February earthquake, and combating the risk of a more chilling effect on nationwide confidence and activity.
- Recent data offers hope that the latter risk has been avoided. However, the RBNZ is not under any immediate pressure to reverse the cut, as it appears to have some breathing room on the inflation front.
- We expect this week’s statement to reassert that monetary policy will be guided by the post-quake reconstruction timeline, which on current assumptions would put the first rate hike in Q1 next year.
