In line with broad expectations, RBNZ keeps OCR unchanged at 5.5%, as tightening cycle has finally entered in to a pause phase.
RBNZ expressed its confidence in the current restrictive interest rate level, stating, “consumer price inflation will return to within its target range of 1 to 3% per annum, while supporting maximum sustainable employment.”
When discussing their Remit objectives, the Committee noted that it still expects inflation to fall within the target band by the second half of 2024. Risks surrounding the inflation projection as being “broadly balanced”. While employment remains above its maximum sustainable level, recent indicators suggest that “labour market conditions are easing.”
RBNZ also acknowledged the slight contraction in economic activity in Q1. It added that “growth is likely to remain weak in the near term.”
