I posted the announcement on Twitter – make sure you are following @ForexLive for the most rapid updates on time-sensitive news.
- Market expectations were for a 0.25 hike
- Rates now to 3.50%
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Comments from Reserve Bank of New Zealand:
- Says NZD unsustainable at current levels
- Says economy adjusting to previous rate rises, economy seen growing at 3.7% in 2014
- Says speed, extent of hikes to depend on assessment of tightening to date
- Says inflation moderate, wages subdued, house price inflation slowing
- Says latest move will help keep inflation near 2%
- Strong immigration gains fueled housing demand
- Economy appears to be adjusting to tightening
- Growth among trading partners looks to have eased in H1, but may be temporary
- Says inflation is moderate, but strong output growth taking up spare capacity
- Potential for significant falls in NZD
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Announcement: RBNZ raises OCR to 3.5 percent
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Kiwi dollar still tumbling as I update the post. ‘Sell the fact’ as the tightening cycle appears to have completed for the time being – analyst reactions still to come, but prior to the hike expectations were for a pause now until December at least. That would seem to certainly be the case, and given the softening of data of late I reckon it might be further down the track thatn that.