25% chance of RBNZ rate hike on Tues?

25 ก.พ.

25% chance of RBNZ rate hike on Tues?

The Reserve Bank of New Zealand (RBNZ) is likely to maintain its interest rate at the existing 5.50%, yet there might be a notable 25% probability of a 25-basis points hike.

Why? In part, the RBNZ provided a hawkish signal post its recent meeting.

The RBNZ's forward guidance suggests an inclination towards future hikes, with the March 2024 outlook adjusted to 5.63%, and December 2024 elevated to 5.66%.

ANZ Bank goes a step further, forecasting consecutive rate hikes until April, culminating in a 6.00% OCR. NZ Bank stands alone in predicting a rate hike, the consensus among other market economists leans heavily towards maintaining the status quo.

KiwiBank economists share the consensus view that the RBNZ will likely keep the interest rates unchanged. However, they anticipate a continuation of strong language and a “very forceful, hawkish bias,”

A Reuters survey resulted in 27 out of 28 economists foreseeing no change.

Still, these disparities in predictions highlight the uncertainty surrounding the impending decision and the potential for a significant market reaction depending on the central bank's course of action as well as the language they use to deliver the news.

The RBNZ delivers its decision on Tuesday 9:00 pm (US time, UTC -5).