New Zealand to keep policy rates unchanged for longer

The Reserve Bank of New Zealand (RBNZ) left the cash rate at 3.0% earlier today, as expected. What’s more, the Monetary Policy Statement (MPS) was downbeat, yet again. We have adjusted our forecast and now anticipate that the cash rate will move up from mid-2011, rather than in Q1. However, we continue to expect that the cash rate will be lifted to 4.0-5.0% by mid-2012, which is higher than the RBNZ and the markets currently anticipate.

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