Reserve Bank of New Zealand monetary policy decision for April 2024.

  • Committee is confident that maintaining the OCR at a restrictive level for a sustained period will return consumer price inflation to within the 1 to 3 percent target range this calendar year

i.e Higher for longer!!!

more to come

More:

  • The New Zealand economy continues to evolve as anticipated by the monetary policy committee
  • A restrictive monetary policy stance remains necessary to further reduce capacity pressures and inflation.
  • Economic growth in New Zealand remains weak

From the minutes of the meeting:

  • Members agreed they remain confident that monetary policy is restricting demand
  • Restrictive monetary policy is contributing to an easing in capacity pressures to ensure inflation returns to target
  • Further decline in capacity pressure is expected, supporting an ongoing decline in inflation
  • Members agreed they remain confident that monetary policy is restricting demand
  • Measures of business confidence have declined and firms’ own expectations for activity and investment have weakened
  • Near-term business pricing intentions have declined but remain elevated, in part reflecting an uptick in both realised and expected costs.
  • Continued strength in net migration, is supporting aggregate consumer spending and rising dwelling costs
  • The committee agreed that interest rates need to remain at a restrictive level for a sustained period
  • Members agreed that the balance of risks was little changed since the February
  • Members agreed that there remains limited tolerance to increase the time to achieve the inflation target while inflation remains outside the target band and while inflation expectations and pricing intentions remain elevated
  • Members agreed that persistence of services inflation remains a risk and goods price inflation remains elevated
  • Ongoing restrictive monetary policy in an environment of weak global growth could lead to a more rapid decline in inflation than expected

NZD/USD popped higher on the announcment

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Background to this: