The Central Bank of New Zealand (RBNZ) said that interest rate cuts might do if inflation continues to be below the target. In the extraordinary economic assessment update, released on Thursday (21/07/16) early this morning, the central bank stated that the New Zealand economy are sluggish, the currency must be attenuated, and balanced migration kencangnya with weak prices of processed milk products.
New Zealand interest rates, which is abbreviated by the term OCR, is currently at level of 2.25 percent and a likely cut in August and November. If so, then home loan gets cheaper, to deal with this, the RBNZ has done the adjustment rule property on Tuesday.
RBNZ Need Easing Again
"House price inflation are still excessive and the more evenly in each area, (this) adds to concerns about the financial stability of the word Governor Graeme Wheeler." The Central Bank currently maintains a macro policy measures aimed at minimizing risks to financial stability from the boom of home prices. "
In addition, the RBNZ also broached the issue of the exchange rate of New Zealand dollar 6 percent higher than in June, expectations and adds to the pressure on the milk production sector, manufacturing, and inflation. "This makes it difficult to reach the central bank's inflation goal. Thus, the drop in the exchange rate are required. "
Wheeler said the outlook for inflation which in June reached only 0.2 percent, weaker than the RBNZ's expectations in June. This makes the RBNZ monetary policy should remain accommodating and the possibility of more easing would be needed so that average inflation remains close to the range to the target.
NZD/USD 0.64 percent SAG post report RBNZ released and traded at 0.6977. However, when the news was written, the pair seemed to recover and get back onto the Ascension towards numbers 0.6996. RBNZ economy before the update was released, NZD/USD positions 0.7025.
EmoticonEmoticon