Reserve Bank of New Zealand governor Graeme Wheeler speaking to the Canterbury Employers Chamber of Commerce in Christchurch:
- Says period of cash rate stability most prudent option
- Says inflation seen below target band, negative for a while, before rising more gradually to around 2 pct
- Says inflation outlook suggests rates on hold for some time
- Says would need confidence spare capacity, labour market generating substantial inflation lift before any rate rise
- Says rate cut might be appropriate if sufficient capacity to cope with extra demand
- Says deteriorating domestic demand from drought or worse external outlook may warrant rate cut
- Says NZ economic prospects good, growth drivers sustainable
- Says main risks are china economy outlook; house, dairy, oil prices
- Says house price inflation appears rising in Auckland; monitoring impact on financial stability, wider economy
- Says trade weighted NZD level unjustified, unsustainable despite recent easing; significant further fall expected
Headlines via Reuters
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And, via Bloomberg:
- Says New Zealand economy is performing well
- Rate cut may be warranted if price pressures ease more
- Says rate cut could be appropriate if demand weakens
- Need to see labor, price pressures before raising OCR
- Says future rate adjustments could be ‘up or down’
- Says RBNZ expects to keep rates on hold for some time
- Says RBNZ rate stability prudent in current situation
- Sees further significant kiwi drop despite recent fall
- Says NZ dollar still unjustifiably, unsustainably high
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Wheeler is quite reliable at speeches, press conferences etc. He often gives the local currency a kick lower (or, at least, tries to). Also, his comments on the likley direction of rates in NZ come after the most recent meeting where the RBNZ pulled back on its tightening bias, so are not surprising.