RBNZ Expected To Cut Rates Later

Array
(
    [0] => Array
        (
        )

    [1] => Array
        (
        )

)

By Rudi Filapek-Vandyck

It’s good to have a few sources around. One of them tells us this morning GSJB Were’s NZ economists Bernard Doyle & Shamubeel Eaqub have revised their projected timing for an interest rate cut in New Zealand.

Previously, GSJB Were thought an interest rate cut by the RBNZ was likely to occur in the third quarter of this year. Doyle and Eaqub now think Kiwi interest rates won’t be lowered before the first quarter of 2007.

Their main motivation seems to be inspired by higher inflation across the Tasman, leaving the RBNZ with little space to act on interest rates combined with the fact that the predicted economic slowdown is occurring more gradually than previously thought.

The broker currently believes economic growth in New Zealand will fall to 1.0% for 2006.

Click to view our Glossary of Financial Terms