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Reserve Bank of New Zealand monetary policy meeting next week – 50bps rate hike expected


ANZ previewing RBNZ next week, and beyond:

  • April Monetary Policy Review (MPR). We continue to expect them to increase OCR by 50bps next week
  • and again in May
  • then continue in 25bp increments at each meeting until OCR peaks at 3.5% in April 2023

ANZ on New Zealand Inflation:

  • the risks abound. On the inflation side, inflation expectations continued their worrying rise. In our March business outlook, 96% of companies expected costs to rise over the next three months, and pricing intentions and inflation expectations continued to rise to record highs or approach it.
  • Moreover, global inflationary pressures only continue to surprise on the upside
  • The Russian invasion of Ukraine has triggered immense volatility in commodity prices, but overall prices are well up on the same period last year.
  • With key cities in China entering new lockdowns as COVID cases rise, it could also lead to further disruption to shipping – adding to imported inflation in New Zealand.

And add this concern for the RBNZ:

  • Unfortunately, even as inflation continued to rise, growth prospects continued to weaken. Business and consumer confidence deteriorated markedly at the start of 2022, and supply disruptions mean that growth in the national economy this year will be hard-won.

The main thing, however…

  • But none of this gives the RBNZ a reason to refrain from raising interest rates.

The Reserve Bank of New Zealand’s policy decision is due on April 13 at 02:00 GMT.


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