OCR good news for borrowers
As expected the central bank left the OCR at 3.50%, however the key change was new language used by the bank.
RBNZ governor Graeme Wheeler dropped the phrase “some further policy tightening will be necessary to keep future average inflation near the two percent target mid-point and ensure that the economic expansion can be sustained” and replaced it with: "A period of assessment remains appropriate before considering further policy adjustment."
The comments surprised economists who described the statement as "dovish". As noted in the mortgagerates.co.nz survey of economists future OCR hikes have been pushed further into the future and the estimated peak for the OCR, or the neutral cash rate, has been reduced to around 4- 4.5%.
The bank's statement repeats September's language on the currency. It remains "unjustified and unsustainable" and the bank continues to expect further significant depreciation.
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
