RBNZ left rate unchanged at 5.5% on its meeting today. In its media release RBNZ confirmed that “restrictive monetary policy has significantly reduced consumer price inflation’ and projected that “inflation to return to within the 1 to 3 percent target range in the second half of this year”. It is more positive projections than what has been given last time in which the level of only 4% was expected to be reached this year.
The market currently expects that monetary policy will be eased at the meeting in November. However, data will be watched to assess possible changes to the timing of first rate cuts.