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☆ RBNZ Governor says central bank policy now officially contractionary
▼ + stars: | 2022-11-23 | by ( Lucy Craymer | ) www.reuters.com time to read: +2 min

WELLINGTON, Nov 24 (Reuters) - New Zealand's central bank governor said on Thursday benchmark interest rates needed to go higher and the country also needed to go into recession to get spiralling inflation under control, which would mean pain for some home owners. As we've said before, inflation is no one's friend and causes economic costs," Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr told a committee at parliament. New Zealand's central bank raised its official cash rate by a record 75 basis points to a near 14-year peak of 4.25% on Wednesday as it struggles to contain inflation near three-decade high. The central bank surprised the market with its hawkish tone and forecast that rates would now peak at 5.5%, compared with a previous forecast of 4.1%. He added that the central bank committee realised it need to do more and sooner to break that spiral.

☆ New Zealand house prices forecast to drop 18% from peak
▼ + stars: | 2022-11-23 | by ( Vivek Mishra | ) www.reuters.com time to read: +3 min

Average house prices in the country rose by more than 40% at the height of the pandemic before reaching a peak in November last year at levels the Reserve Bank of New Zealand (RBNZ) said were unsustainable. Still, that fall would be tiny compared to the 250% rise in New Zealand house prices since 1998, almost four times the average increase across OECD countries. House prices have nearly doubled in the last seven years alone. Asked how much average house prices would fall from peak to trough, analysts who answered an additional question gave a median estimate of 18%, with forecasts in a 14%-23% range. But a lot needs to happen to better balance the housing market here with a horrible undersupply of houses," said Jarrod Kerr, chief economist at Kiwibank.

☆ New Zealand's central bank raises rates by 75bps
▼ + stars: | 2022-11-23 | by ( Lucy Craymer | ) www.reuters.com time to read: 1 min

WELLINGTON, Nov 23 (Reuters) - New Zealand's central bank raised interest rates by 75 basis points to a near 14-year high of 4.25% on Wednesday and flagged more hikes to come as it struggles to contain stubbornly high inflation. Fifteen of 23 economists in a Reuters poll forecast the Reserve Bank of New Zealand (RBNZ) would move by 75 basis points, the ninth straight hike since it began tightening in October 2021. It now expects the cash rate to peak at 5.5% in September 2023, according to the monetary policy statement. Reporting by Lucy Craymer; Editing by Sam HolmesOur Standards: The Thomson Reuters Trust Principles.

WELLINGTON, Nov 22 (Reuters) - New Zealand's central bank is expected to deliver its biggest ever rate point hike this week as it continues efforts to temper inflation ahead of a three-month break. A Reuters poll found 15 of 23 economists expect the central bank to lift the cash rate by a record 75 basis points. HOME AND AWAYNew Zealand-based economists are more hawkish than their international counterparts, unanimously expecting the central bank to hike by 75 basis points. The central bank will also release new economic forecasts and potentially an updated cash rate track. "It all comes down to the language around the OCR (official cash rate) track and its shape," said Kiwibank in a note.

☆ New Zealand delivers record rate hike, flags more to come
▼ + stars: | 2022-11-22 | by ( Lucy Craymer | ) www.reuters.com time to read: +3 min

The Reserve Bank of New Zealand (RBNZ) raised the official cash rate (OCR) by 75 basis points to 4.25%, its highest since January 2009. The RBNZ also increased the projected peak for the cash rate to 5.5% in September 2023 where it expects it to remain into 2024. The RBNZ has remained more hawkish than its Australia counterpart, which has slowed its rate increases in recent months. Wednesday's ninth straight hike means the cash rate has now risen 400 basis points since October 2021 and is the most aggressive tightening by the central bank since 1999 when the cash rate was introduced. Worrying the bank is non-tradeable inflation--or prices for goods that are not exposed to global markets--which is running at a record.

☆ New Zealand's RBNZ seen raising rates by historic 75 bps
▼ + stars: | 2022-11-17 | by ( Devayani Sathyan | ) www.reuters.com time to read: +3 min

Reuters Poll: RBNZ monetary policy outlookThe largest banks in the country - ANZ, ASB, Kiwi Bank, Bank of New Zealand and Westpac - expect a 75 bp hike on Wednesday, matching the recent pace of the U.S. Federal Reserve. "We are forecasting the OCR to peak at 5.0%, via another 75 bp hike in February on a 'let's just get it done' basis. If data cools more rapidly than expected the RBNZ could well slow the pace at that point." Rates were expected to peak at 4.75% and remain unchanged until the end of next year, according to the median view in the poll. According to the latest RBNZ survey, inflation is expected to ease only modestly over the coming year and will be higher than previously predicted.

☆ New Zealand central bank review supports monetary policy decisions
▼ + stars: | 2022-11-09 | by ( Lucy Craymer | ) www.reuters.com time to read: +2 min

WELLINGTON, Nov 10 (Reuters) - The New Zealand central bank's dramatic easing in monetary policy was largely warranted over the COVID-19 pandemic, but with hindsight policy tightening should have occurred earlier in 2021, an internal report released by the central bank on Thursday found. The internal review, which looked at how the Reserve Bank of New Zealand (RBNZ) made decisions about monetary policy in the past five years and what lessons could be learned, found monetary policy decisions were consistent with the data available at the time, while worst case scenarios were avoided. It did find with the benefit of hindsight that monetary policy should have been tightened earlier in 2021 either by lifting the cash rate or reducing asset purchases. New Zealand's central bank started an aggressive tightening cycle in October 2021 and has increased the cash rate in just over a year to 3.5% from 0.25%. Orr said in a statement that the period reviewed had been uniquely challenging and they could learn from the conduct of monetary policy.

☆ New Zealand jobless rate remains low, wage inflation hits record
▼ + stars: | 2022-11-02 | by ( Lucy Craymer | ) www.reuters.com time to read: +2 min

WELLINGTON, Nov 2 (Reuters) - New Zealand's jobless rate held at 3.3% in the third quarter, and wage inflation hit its highest level on record, adding to expectations the central bank will increase interest rates by a historic 75 basis points at its next meeting. HOT JOB MARKETThis tightness saw wage inflation hit its highest levels since the survey began in 1993 with third-quarter seasonally adjusted private sector wages up 3.8% on the previous year. Wage inflation highlights the extent of the challenge that the RBNZ faces bringing inflation under control, Michael Gordon, acting chief economist at Westpac said in a note. "There is no room for relenting on the path to higher interest rates yet," he said. New Zealand inflation is running at 7.2%, far above the central bank's target of 1-3% over the medium term.

☆ New Zealand central bank can get inflation under control: RBNZ governor
▼ + stars: | 2022-11-02 | by ( Lucy Craymer | ) www.reuters.com time to read: +1 min

WELLINGTON, Nov 3 (Reuters) - New Zealand central bank Governor Adrian Orr said on Thursday he was confident the central bank can get inflation under control as the country battles a tight labour market. Inflation in New Zealand is currently sitting at 7.2%, well above the bank's target of 1% to 3%. Orr said the Reserve Bank of New Zealand (RBNZ) has a "laser-like" focus on controlling inflation. A tight labour market saw wage inflation in the third-quarter rise to the highest level since the survey began in 1993. Orr added that the tight labour market was also the biggest constraint on businesses in New Zealand.

☆ RBNZ says global financial stress will test New Zealand's financial resilience
▼ + stars: | 2022-11-01 | by ( Lucy Craymer | ) www.reuters.com time to read: +1 min

WELLINGTON, Nov 2 (Reuters) - The Reserve Bank of New Zealand said on Wednesday the country's financial system is as a whole resilient but global financial stress will test this. "The rising global interest rates necessary to curb inflation will test New Zealand's financial resilience," Governor Adrian Orr said in the bank's financial stability review, which is released twice a year. "While our financial system as a whole is resilient, some households and businesses will be challenged by the rising interest rate environment," Orr added. New Zealand's central bank has aggressively hiked interest rates as it has sought to get on top of a red-hot housing market and soaring inflation. The central bank, however, said house prices remain above their sustainable level, and that a further gradual decline would be positive for long-term financial stability.

Oct 31 (Reuters) - The Reserve Bank of New Zealand said on Monday its annual stress test on the banking sector showed banks were "well placed" to overcome stagflation. The RBNZ's Deputy Governor Christian Hawkesby said while banks' capital buffers would take a hit in a stagflation scenario, where high inflation is paired with negative economic growth, they would remain well above the regulatory minimums. Inflation in New Zealand is tracking just below three-decade highs at 7.2% and the central bank has been aggressively hiking the cash rate to try to dampen it. Gross domestic product rose 1.7% in the June quarter, but increases in the cash rate raise the risk of a contraction. The Central Bank is due to release its twice yearly Financial Stability Report on Nov. 2.

☆ Aggressive rate hikes the name of the game for big central banks
▼ + stars: | 2022-10-27 | by ( ) www.reuters.com time to read: +5 min

LONDON, Oct 27 (Reuters) - The European Central Bank delivered a second straight 75-basis-point interest rate hike on Thursday, the latest sign that major central banks are serious about curbing hot inflation. Central banks in the 10 big developed economies have raised rates by a combined 2,165 basis points (bps) in this cycle to date, with Japan the holdout "dove." But the pace of these rate rises is starting to slow - Canada just delivered a smaller-than-anticipated rate hike. That would be the fourth straight rate increase of that magnitude, bringing the policy rate to the 3.75%-4.00% range as part of what has been the sharpest set of U.S. rate increases in about 40 years. Reuters Graphics7) SWEDENSweden's central bank raised its key rate on Sept. 20 by a larger-than-expected one percentage point to 1.75%.

☆ RBNZ Governor Orr: New Zealand is relatively well positioned but inflation too high
▼ + stars: | 2022-10-26 | by ( Lucy Craymer | ) www.reuters.com time to read: +1 min

WELLINGTON, Oct 27 (Reuters) - New Zealand's central bank governor, Adrian Orr, said on Thursday that while the country was relatively well positioned to meet challenges inflation remains too high. Orr added that the central bank had its eyes firmly focused on meeting its inflation target of 1% to 3%. "New Zealand is relatively well positioned but inflation is still too high in an absolute sense," he said in a speech to the Institute of Finance Professionals of New Zealand in Auckland. New Zealand's central bank in early October lifted interest rates to a seven-year high and promised more pain to come as it struggles to cool inflation at near three decade highs in an over-stretched economy. New Zealand's central bank is due to release its twice yearly Financial Stability report on Nov. 2.

☆ New Zealand Q3 inflation smashes expectations, boosts case for hawkish hikes
▼ + stars: | 2022-10-18 | by ( Lucy Craymer | ) www.reuters.com time to read: +2 min

Annual inflation ran at 7.2% in the third quarter, sitting just below a three-decade high, Statistics New Zealand said in a statement on Tuesday. Inflation slowed slightly from 7.3% in the second quarter but far outpaced expectations in a Reuters poll for a 6.6% annual rise. "With the RBNZ having the inflation bit between its teeth, all options are likely to remain on the table." Smith said they had changed their OCR forecast and were now expecting a 75-basis-point rate hike in November, and two further 50 bp rate hikes in February and April 2023. Statistics New Zealand added that annual non-tradable inflation - products made in New Zealand for domestic consumption - rose 6.6%, the highest since it began tracking that data in June 2002.

☆ New Zealand third-quarter inflation outpaces expectations
▼ + stars: | 2022-10-17 | by ( Lucy Craymer | ) www.reuters.com time to read: +1 min

Annual inflation rose 7.2% in the third quarter, slowing from a 7.3% gain in the second quarter and sits just below three-decade highs, Statistics New Zealand said in a statement on Tuesday. The data was above economists’ expectations for a 1.6% rise for the quarter and a 6.7% annual rise, according to a Reuters poll. The New Zealand dollar rose slightly after the data showed inflation was hotter than expected. The main drivers of the 7.2% annual inflation were rising prices for construction, local government taxes and rentals for housing, Statistics New Zealand said in a statement. Statistics New Zealand added that annual non-tradable inflation - products made in New Zealand for domestic consumption - rose 6.6%, the highest since it began tracking that data in June 2002.

☆ Central banks unleash 350 basis points more of rate hikes in inflation fight
▼ + stars: | 2022-09-22 | by ( ) www.reuters.com time to read: +6 min

Central banks in the 10 big developed economies have raised rates by a combined 1,965 basis points in this cycle to date, with Japan the holdout "dove", sticking on Thursday with its ultra-low rates policy. read moreThe Fed's new projections showed its policy rate rising to 4.4% by year-end, before peaking at 4.6% in 2023. read moreOn Sept. 7, the BoC hiked its policy rate to 3.25%, its highest level in 14 years. Canada was the first among the world's advanced economies in the current policy-tightening cycle to deliver a 100 bps rate. That implies at least one more 50 bps rate hike at upcoming meetings.

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