Reserve Bank of New Zealand decision preview: 25-basis-point hike largely expected

TechFlow news, Oct. 28: According to Jin10 Data, multiple institutions are previewing the Reserve Bank of New Zealand's rate decision today, with a broad expectation of a 25-basis-point hike. New Zealand's current inflation rate is 3.7%, above the 1% to 3% inflation target, and Standard Chartered said there remains a significant chance of further rate hikes.

A Reuters survey showed that 22 of 27 economists expect the Reserve Bank of New Zealand to raise rates by 25 basis points in October. A majority of members of the Reserve Bank of New Zealand Shadow Committee also recommended a 25-basis-point hike, but several members preferred to give previous rate hikes more time to work through the economy.

Views remain divided on the subsequent tightening path. TD Securities, ANZ, ASB Bank and Westpac expect rates to rise to 3.50%, while Bank of New Zealand expects a peak rate of 3.75%; in the Reuters survey, 13 respondents expect the official cash rate to remain at 3.00% by year-end, and 9 expect it to rise to 3.25% in December.

Source: TechFlow