tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Wednesday, September 30th, 3:27PM

Mortgages

rss
Latest Headlines

Will the Reserve Bank change course?

The Reserve Bank will adopt a more neutral tone on the future direction of the official cash rate this month, according to economists at one major bank.

Monday, February 3rd 2020, 10:11AM

The Reserve Bank adopted an "easing bias" through 2019, indicating rates were more likely to be cut than increased. But strong economic and housing data, and the Government's infrastructure plan, could make it abandon its negative outlook, say Westpac economists.

Westpac chief economist Dominick Stephens (pictured) says: "At both the August and November MPSs, the RBNZ implied there was a 50/50 chance of an OCR cut in the near future. The RBNZ’s finger was on the OCR-cut trigger. This was implied not only by the RBNZ’s language, but also by the RBNZ’s OCR forecast. The OCR forecast was 0.9%, half way between keeping the OCR at 1.0% and dropping it to 0.75%.

"We think the RBNZ will abandon this strong easing bias and move to a more neutral monetary policy outlook. We expect the OCR forecast will be steady at 1.0% for at least the coming year. The flavour of the RBNZ’s language may be that it expects to keep the OCR at its current level for an extended period, but will react to evolving data as necessary."

Stephens added: "The RBNZ will probably also repeat its long-held line that it expects to keep the OCR low for an extended period, to help ensure that markets do not overreact to the change of stance. This would be a small surprise to financial markets, which have been steadily moving away from the idea of OCR cuts, but probably still expect the RBNZ to maintain its easing bias."

While green shoots of optimism creep into the economic outlook, Westpac economists agree with Tony Alexander that the coronavirus could impact growth and the direction of the OCR. 

"The coronavirus outbreak is a key uncertainty. If the situation worsens enough over the coming week, then the RBNZ could maintain its easing bias. More likely, the RBNZ will adopt a “wait and see” approach, saying that it will monitor the coronavirus and react if necessary."

Westpac predicts the RBNZ will be prompted to cut rates in the second half of 2020. 

"We still think the longer-term risks are more tilted towards a lower OCR than higher," Stephens added.

Tags: RBNZ Reserve Bank Tony Alexander Westpac

« Could the coronavirus hit the housing market?ANZ raises key mortgage rates »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
SBS Bank 4.54 3.05 3.19 3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.55 2.69 2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.29 3.45 3.59
TSB Special 4.54 2.49 2.65 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.15 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.00 3.13 3.02

Last updated: 21 September 2020 10:48am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com