It is The Reserve Bank of New Zealand (RBNZ) is likely to start its rate hike cycle from August, then rise again in November and bring your official cash rate (OCR) to 2% or more for the third quarter of 2022, MNI reported, citing comments from the former RBNZ deputy governor. Grant Spencer.
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“The speed of the rebound in the New Zealand economy has come as a surprise and now it was overheating.”
“We also have very strong demand pushing restricted supply.”
“The inflationary pressures will remain strong due to the continued isolation of New Zealand as a result of the pandemic. “
As for interest rates, there was a “real risk of getting behind the curve” if the bank did not raise rates in August.
“It it would be wise to have a raise at the next meeting because they will attempt a soft landing and that will require an incremental approach. “
“One Stronger New Zealand dollar is another risk to the economy, since it would have a negative impact in terms of trade. “
“The RBNZ would soon end its loan financing program, which has offered a cheap source of financing for commercial banks “.”
“If they remove it, there may be some upward pressure on bank financing costs. A soft landing for the rampant housing market is another challenge for the RBNZ.”
“There is a risk of house price declines, but I don’t see a collapse, and without adjusting that would increase the risk of a hard landing in that market.”
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