OCR expected to stay at record low

  • 06/11/2017
Cash
It's a full monetary policy statement so the central bank will also release economic forecasts. Photo credit: Getty

The Reserve Bank of New Zealand (RBNZ) is expected to leave the official cash rate unchanged at 1.75 percent on Thursday after mulling a range of risks.

It's a full monetary policy statement so the central bank will also release economic forecasts.

ANZ economists say there is more political clarity, but still plenty of uncertainty since the RBNZ pronounced on interest rates in September.

"Fiscal policy will become far more expansionary, but to what extent is unclear, particularly when it needs to be weighed up against possible housing and migration restrictions."

Growth may be downgraded and inflation upgraded in the forecasts.

Housing market activity has remained soft, consumer confidence is still decent, but business sentiment has waned.

"We remain biased to OCR hikes in time but questions surround the timing."

The NZ dollar is lower than where the RBNZ assumed it would be in its August MPS projections but export commodity prices had held up, which was positive for growth.

NZN