“Sneak peek”: Reserve Bank of New Zealand is expected to hike its official exchange rate by 50bps

  • RBNZ will increase its OCR by half a percent this week (July 13, 2022)

This goes through the New Zealand Institute of Economic Research (NZIER). NZIER has set up a “Shadow Board”:

  • Its Shadow Monetary Policy Board is independent from the Reserve Bank of New Zealand
  • Participants assess what they think the RBNZ should do, but necessarily what it will do

The consensus among analysts is that the RBZ will rise 50 basis points, so in this case, the Shadow Board’s normative view is the same.

Back to the Shadow Board, this in a nutshell:

  • The widely held view within the Shadow Board is that the Reserve Bank of New Zealand should increase the official exchange rate (OCR) by 50 basis points at the next meeting in July. Only one member of the business community was divided on the need for such a large increase at the next meeting, given the delicate balance between the increase inflation and signs of slowing economic activity.
  • While many members stressed the need for the Reserve Bank to contain inflationary pressures by raising interest rates, emerging signs of slowing demand raised concerns about the long-term growth outlook.
  • June’s final quarter release of the NZIER Quarterly Business Opinion Survey highlighted the difficult balancing act facing the Reserve Bank as inflationary pressures mount amid a slowing global economy. demand in the New Zealand economy.


The RBNZ announcement is scheduled for 02:00 GMT on July 13:

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