RBNZ Policy Review Reinforces Expectations for Rate Increase in November or Earlier

RBNZ’s policy review shows that it has clearly changed direction from its May statement and has decided that the time for rate increases is very soon, says ASB. “We continue to expect the RBNZ to hike in November,” says ASB. “Key upcoming data will influence exactly when, and there is the potential for the RBNZ to move earlier than that if data are sufficiently strong,” it says. RBNZ said it would reduce stimulus by halting its purchases of government bonds, which comes before the market expected. NZD/USD jumped to 0.7010 from 0.6964 before the announcement.

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