After quarterly inflation figures that contained, in the words of one economist, 'a number of red flags' for the Reserve Bank, upcoming labour market data are seen as key ahead of the RBNZ's next Official Cash Rate decision in August
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WELLINGTON (Reuters) -New Zealand’s central bank on Wednesday announced a halt to its pandemic-induced quantitative easing programme, sending the Kiwi dollar soaring as markets bet that a rate hike was now imminent this year.
FILE PHOTO: Pedestrians walk near the main entrance to the Reserve Bank of New Zealand located in central Wellington, New Zealand, July 3, 2017. REUTERS/David Gray
The Reserve Bank of New Zealand (RBNZ) kept its official cash rate at 0.25% but cut short a NZ$100 billion ($70 billion) bond buying programme, prompting local banks to bring forward calls for a rate rise to as early as August, which would put New Zealand at the forefront of countries to raise interest rates.
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at 1:30 pm on May 20, 2021 | 8 comments
Another economist has reported that the closure of Australia’s international border to immigration will very likely tighten the labour market and drive up wage growth.
This time it is Capital Economics’ Australia & New Zealand Economist, Ben Udy:
We expect wage growth to rise in earnest before long. The dramatic fall in the unemployment rate and the recovery in the underutilisation rate to near pre-virus levels in recent months shows the labour market is recovering quickly. What’s more, labour shortages are putting upward pressure on wage growth with the share of firms anticipating stronger wage growth over the next year soaring to its highest level since the GFC. We expect wage growth to rise from 1.5% in Q1 to more than 3% by the end of 2023.
LSAP retained at NZ$100 bln (Recasts with Governor Orr’s comments from press conference)
WELLINGTON, Feb 24 (Reuters) - New Zealand’s central bank said on Wednesday it was in no rush to tighten monetary policy, after it kept interest rates at record lows and sounded a cautious note about the economic outlook.
The Reserve Bank of New Zealand (RBNZ) said it did not expect to tighten settings until it was confident inflation was sustained at the 2% per annum target midpoint and employment was at maximum sustainable level.
There was no specific date when that confidence would “magically arrive”, Governor Adrian Orr said in a news conference. The central bank kept the official cash rate at a record low of 0.25%, as widely expected.