RBNZ Holds Official Cash Rate at 1.00%

Xe Corporate APAC

November 13, 2019 2 min read

The RBNZ have held the Official Cash Rate (OCR) constant at 1.00% - this surprised the market, who were expecting a rate cut.

The NZ Dollar has rocketed higher across the board.

The key points in the RBNZ statement are:

  • The committee agreed that economic developments since the August had been offsetting for the monetary policy outlook

  • Noted that the risks to the economy in the near term were tilted to the downside

  • Agreed it would add further monetary stimulus if economic developments warranted

  • Debated the costs and benefits of keeping the OCR at 1.0% versus reducing it to 0.75%

  • Agreed that both actions were broadly consistent with the current OCR projection

  • Agreed reduction in the OCR over the past year was transmitting through the economy and would take time to have full effect

  • Noted the bank’s work programme assessing alternative monetary policy tools in the New Zealand environment

  • Noted that business surveys suggest weak growth has continued over the second half of 2019

  • Agreed that accommodative monetary policy remains necessary to continue to meet their inflation and employment objectives

The NZD is higher in immediate response.

The next OCR decision, along with a full Monetary Policy Statement, will be held on the 12th February 2020.

View the RBNZ press release.

Current indicative levels are:

NZD-USD            0.6400 / 0.6425
NZD-AUD            0.9345 / 0.9370
NZD-EUR            0.5810 / 0.5835
NZD-GBP            0.4975 / 0.500
NZD-JPY               69.70 / 69.95

Please contact us for further information or pricing.

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