Graeme Wheeler is governor of the Reserve Bank of New Zealand
Speaking in a news conference following his decision to cut the cash rate today
- Says he considered ocr decision in light of US election results, confirmed it was right decision
- Bank considered whether to amend decision in light of US election, decided not needed
- Felt cut would reduce the risk of short-term inflation expectations falling
- Uncertainty about Brexit, debt accumulation in China
- US election result 'clearly surprised the market'
- Market pricing in US Federal Reserve rate hike at around 80%
- US Federal Reserve will go about its business 'as one might expect they would'
- Market focused on fiscal risks of Trump win, including cuts to corporate tax rate
- Up to the commercial banks to decide if they pass on today's rate cut ... "We may not see a lot of adjustment in terms of lending rates"
- Think at this stage we won't need another rate cut, 20% probability of another rate cut
- Most risks are on the external side
- Had discussions with finance minister on debt-to-income ratios, another meeting in a couple of weeks ... would like it in toolbox
- Possibility, even if its not that high, that rates could be lower than they are today
- Always has an open mind to intervention in the NZD
Took him a while, but finally trots out the intervention threat
More:
- NZ economy doing well, wouldn't want to create excessive volatility by surprising the market
- No need at this stage for further fiscal stimulus in NZ
Also McDermott speaking at the presser (John McDermott is Assistant Governor and Head of Economics):
- Too early to talk with businesses about investment intentions after the US election
- Plan is to keep interest rates low 'for a very long period of time'
Headlines via Reuters
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And that's it for now, presser concludes.
Wheeler will speak again later, at 0010GMT when he answers questions in front of a committee in parliament
