RBNZ: Shift to more neutral stance - Westpac

Research Team at Westpac, notes that the Reserve Bank reduced the Official Cash Rate by 25bps yesterday to a record low of 1.75%, and shifted to a more neutral stance.

Key Quotes

“Further cuts have not completely been ruled out, especially given the continuing uncertainty around the global environment and lingering softness in inflation. However, developments over the past few months have been positive for the New Zealand economy, and the downside risks to the RBNZ’s view have diminished.”

“We expect that the OCR will remain on hold for an extended period. However, longer term rates look set to rise from here.”