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Reserve Bank Holds OCR at 2.75% in Split Decision
The split vote came as the central bank warned inflation could reach 4.4% and left open the possibility of another increase later this year.
- On Wednesday, the Reserve Bank Monetary Policy Committee voted 4-3 to hold the official cash rate at 2.75%, defying overwhelming market expectations for a rate hike.
- Governor Anna Breman sided with three external members to hold the rate, while three internal RBNZ officials voted to raise it amid diverging views on global downside risks.
- The New Zealand dollar plunged nearly a cent against the U.S. dollar after the announcement, while the central bank aims to return inflation to 2% amid temporary disturbances.
- Deutsche Bank's Jim Reid noted the decision contrasted sharply with market pricing, where a hike had been more than 90% expected before the meeting.
- Policymakers signaled additional tightening may still be required to return inflation to 2%, with financial markets placing a 75 percent chance on a rate rise in December.
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11 Articles
Focus On FOMC And Bank Of Canada, After Reserve Bank Of New Zealand Disappointed
The US dollar is mixed against the G10 currencies today. The outlier is the New Zealand dollar, which has been punished in response to the unexpected standpat decision by the central bank.
·Ra'anana, Israel
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New Zealand Unexpectedly Holds Interest Rates Steady; Kiwi Falls
·New York, United States
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Coverage Details
Total News Sources11
Leaning Left1Leaning Right1Center4Last UpdatedBias Distribution67% Center
Bias Distribution
- 67% of the sources are Center
67% Center
L 17%
C 67%
R 16%
Factuality
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