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Central Bank Outlook: New Zealand: Policy Held
- As was nearly universally expected, the Reserve Bank of New Zealand decided to leave the Official Cash Rate (OCR) unchanged at 2.50% following its meeting in October, after similar decisions in its twelve previous meetings, all following the 50 bp rate cut in March 2011 in response to the earthquake.
- DE View: In what is Governor Wheeler’s first public statement, it appears that the new Governor is keeping his cards close to his chest. While the Bank would appear to remain largely neutral overall, it seems that the mention of a modest growth rate, alongside lower inflation, than the Bank projected (0.8% in Q3 vs. 1.0%), may actually be hinting at possible dovish tones emerging. However, none of this will affect policy decisions in the very near-term, with the RBNZ still likely on hold until at least next year.