Yesterday the Reserve Bank of New Zealand kicked off its rate hike cycle:
(read from the bottom bullet point up for chronology)
- RBNZ October monetary policy decision (rate hike) - link to full text
- New Zealand dollar up a few points following the RBNZ rate hike
- New Zealand - RBNZ hike the cash rate by 0.25%, as expected
BNZ is expecting further hikes, November the next one. In brief:
- The key news in today's RBNZ Monetary Policy Review is that the Reserve Bank is currently relatively comfortable the spread of COVID throughout New Zealand will unlikely prevent it delivering the tighter monetary conditions that the economy requires to keep in balance. Not only did the RBNZ raise the cash rate 25 basis points, to 50 basis points, but it also reconfirmed its intent to keep raising interest rates, probably in line with its August Monetary Policy Statement.
- ... We thus continue to forecast 25 basis point cash rate increases at both the November and February Monetary Policy Statements. We then expect the cash rate to rise progressively to 2.25% by mid-2023.
The RBNZ meeting schedule ahead, November 24 2021 and February 23 2022 the next two hikes:
IMHO those who 'sold the fact' of the RBNZ hike yesterday will not want to wait too long to cover.
