Central bank in sweet spot with interest rates
It says NZ's health was never as badly affected by the downturn as to require being admitted to "intensive care" and has relied on "much less, and much less expensive medication" to see it through.
"In this context, Thursday's Monetary Policy Statement (MPS) seems bound to keep signalling the RBNZ has time up its sleeve before any reversal of policy stimulus becomes imperative," it says.
In line with other commentators, the BNZ Capital economists suggest the role of the MPS this week is merely to elaborate on the "steady-she-goes" statements made in October, while avoiding rocking the boat with any statement that could be misconstrued by the markets.
The ASB Business Weekly maintains that the RBNZ will want to keep dampening down expectations of an earlier than stated rate rise and also predicts a continuation of the ‘no change until the second half of 2010' line.
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