Highlights of the RBNZ statement:
- Wheeler says he expects to start rate adjustment soon
- Sees need to return rates to more normal levels
- Scale and speed of the rise in the OCR will depend on future economic indicators
- New Zealand’s economic expansion has considerable momentum
- Growth expected around 3.5% in the year ahead
- Forward-looking measures of firms’ pricing intentions have been rising
- No direct comments on the kiwi
- Full text of Wheeler’s statement
The OIS market priced in a 34% chance of a hike and 12 of 15 economists surveyed by Bloomberg expected no rate hike. NZD/USD quickly fell to 0.8202.
The pledge to adjust rates ‘soon’ is foreshadowing a March hike.
