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23 Apr 2015
RBNZ might cut rates to 3.0% by 2015-end – Capital Economics
FXStreet (Barcelona) - Paul Dales, Chief Australia & New Zealand Economist at Capital Economics, expects RBNZ to maintain rates steady till September 2015, but eventually cut rates to 3.0% by year-end.
Key Quotes
“Although signs of a sustained slowdown are few and far between, it won't be until the second half of the year that the full impact of last year's sharp fall in dairy prices is felt and it will be about that time that the drag on New Zealand from a weaker Australian economy will start to grow.”
“As such, we still think that interest rate cuts will come back onto the RBNZ's agenda this year. But whereas we had previously pencilled in a cut at June's meeting, we now think that the first cut won't come until September at the earliest.”
“We are still sticking to our view that rates will be reduced to 3.0% by the end of the year.”
Key Quotes
“Although signs of a sustained slowdown are few and far between, it won't be until the second half of the year that the full impact of last year's sharp fall in dairy prices is felt and it will be about that time that the drag on New Zealand from a weaker Australian economy will start to grow.”
“As such, we still think that interest rate cuts will come back onto the RBNZ's agenda this year. But whereas we had previously pencilled in a cut at June's meeting, we now think that the first cut won't come until September at the earliest.”
“We are still sticking to our view that rates will be reduced to 3.0% by the end of the year.”