A couple of weeks ago the high exchange rate and weakinflation pressure lead us to update our call on the timingof interest rate hikes by the Reserve Bank this year. Whilewe firmly expect the Bank to hike rates by 25 basis pointsin June, we suggested it would use the accompanyingMonetary Policy Statement to signal a slightly slower paceof hikes in the second half of the year, pausing in July,before raising rates in September and December.
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Westpac