16 Dec 2015
RBNZ: Two more rate cuts likely in June and Aug 2016 – Westpac
FXStreet (Delhi) – Sean Callow, Research Analyst at Westpac, notes that the RBNZ cut the OCR four times from Jun to Dec 2015, fully reversing the 2014 tightening.
Key Quotes
“The Dec statement noted softer growth and thus “an increase in spare capacity and unemployment”.
Governor Wheeler gives the clear impression that he believes 2.5% will be the right cash rate for some time. However, he still included in the statement the concession that “the Bank will reduce rates if circumstances warrant.”
Westpac looks for 2 more rate cuts this cycle, in June and Aug 2016, to 2.0%. Inflation and growth are likely to disappoint the RBNZ in H1 2016.”
Key Quotes
“The Dec statement noted softer growth and thus “an increase in spare capacity and unemployment”.
Governor Wheeler gives the clear impression that he believes 2.5% will be the right cash rate for some time. However, he still included in the statement the concession that “the Bank will reduce rates if circumstances warrant.”
Westpac looks for 2 more rate cuts this cycle, in June and Aug 2016, to 2.0%. Inflation and growth are likely to disappoint the RBNZ in H1 2016.”