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“Preview”: Reserve Bank of New Zealand expected to raise its official cash rate 50bps


  • RBNZ to hike its OCR by half a percent this week (13 July 2022)
Eamonn Sheridan

This comes via the New Zealand Institute of Economic Research (NZIER). The NZIER put together a “Shadow Board” :

  • Its Monetary Policy Shadow Board is independent of the Reserve Bank of New Zealand
  • Participants assess what they think the RBNZ should do, net necessarily what the will do

The consensus view amongst analysts is that the RBZ will hike by 50 basis points, so in this case the Shadow Board’s normative view is the same.

Back to the Shadow Board, this in brief:

  • The widely held view amongst the Shadow Board is that the Reserve Bank of New Zealand should increase the Official Cash Rate (OCR) by 50bp at the upcoming meeting in July. Only one member from the business community was divided on whether such a large hike was necessary at the next meeting, given the fine balance between the surge in  inflation  and signs of slowing economic activity.
  • While many members pointed to the need for the Reserve Bank to rein in inflation pressures by lifting interest rates, emerging signs of an easing in demand raised concerns about the longer-term growth outlook.
  • The release of the latest June quarter NZIER Quarterly Survey of Business Opinion highlighted the tricky balancing act faced by the Reserve Bank as inflation pressures intensify against a backdrop of slowing demand in the New Zealand economy.


RBNZ announcement is due at 0200 GMT on July 13:

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