• OCR unchanged at 2.5%, as universally expected.
• The statement is slightly firmer than in the June MPS, mainly through the addition of “the extent of the monetary policy response will depend largely on the degree to which the growing momentum in the housing market and construction sector spills over into inflation pressures”.
• The RBNZ views the NZD as ‘high’ rather than ‘overvalued’, a slight change in its assessment of the currency.
• We continue to expect the RBNZ to first lift the OCR in March 2014. We see the risks as balanced, and today’s statement highlights that earlier hikes are a possibility.
Read the full report: Market Research
Commonwealth Bank