Following the announcement of a rate hike by the Reserve Bank of New Zealand on Wednesday, Goldman Sachs analysts have adjusted their tightening outlook for the central bank.
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“In light of the RBNZ’s aggressive guidance and today’s OCR move, we now we expect the RBNZ to rise by +25 basis points at each meeting in 2022, taking the OCR to 2.5% by the end of the year (previous peak at 2.0% in August).”
“The RBNZ has shown its determination to design stricter financial conditions in the medium term in order to cushion inflationary pressuresand we believe that his perception of global inflation risks in the medium term will cause him to continue to tighten rates in the course of this year”.
“Having said that, while we believe further tightening in 2023 is possible, we do not see this as the most likely scenario if global inflationary pressures ease and house prices decline as we expect.”
Source: Fx Street
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