New Zealand: RBNZ dials down its hawkish tone – UOB Group


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The
Reserve
Bank
of
New
Zealand
(RBNZ)
has
decided
to
leave
its
official
cash
rate
(OCR)
unchanged
at
5.50%
in
Jul
for
an
eighth
straight
meeting.
The
RBNZ’s
tone
was
a
lot
less
hawkish
than
in
May,
UOB
Group
economist
Lee
Sue
Ann
notes.

RBNZ
leaves
its
official
cash
rate
unchanged

“RBNZ
has
decided
to
leave
its
official
cash
rate
(OCR)
unchanged
at
5.50%
in
Jul
for
an
eighth
straight
meeting.
The
decision
earlier
today
(10
Jul)
was
an
interim
review,
and
hence
there
was
no
Monetary
Policy
Statement,
updated
economic
forecasts
nor
press
conference
by
RBNZ
Governor

Adrian
Orr
.”

“The
RBNZ’s
tone
was
a
lot
less
hawkish
than
in
May,
when
policymakers
discussed
the
case
to
raise
rates
further
while
signaling
that
a
rate
cut
was
unlikely
before
3Q25.
Instead,
there
was
no
mention
of
a
rate
hike
today,
and
the
RBNZ
highlighted
that
‘restrictive
monetary
policy
has
significantly
reduced
consumer
price
inflation’.”

“We
are
currently
maintaining
our
view
for
the
first
rate
cut
to
occur
in
4Q24,
as
recent

economic
data

shows
the
service
and
manufacturing
sectors
softening
and
business
confidence
falling.
All
eyes
will
now
turn
to
2Q24

CPI

data
on
17
Jul,
while
the
next
monetary
policy
meeting
will
be
on
14
Aug.”