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Kiwi Leaps Higher On Hawkish RBNZ Statement, OCR Raised By 50bp As Expected

NZD

The kiwi dollar catches bid on the back of hawkish statement accompanying the RBNZ's decision to raise the OCR by the expected 50bp increment.

  • The Committee said it "remains resolute in achieving the Monetary Policy Remit" and judged that it is appropriate to "continue to tighten monetary conditions at pace." The summary record of the meeting revealed that policymakers debated whether to raise the OCR by 50bp or 75bp. The latter outcome had not been forecast in any of the sell-side previews seen by us, while swaps were fully pricing a 50bp move.
  • Members acknowledged that the NZD has been under downward pressure amid higher global interest rates and increased risk aversion, which "poses further upside risk to inflation over the forecast horizon," while dropping the mention of increased exporter returns that was present in the August statement.
  • NZD/USD has added 40 pips to last trade at $0.5770, stabilising around that level. Yesterday's high gave way in the process but the broader technical contours remain intact, with bulls still looking for gains towards the psychological $0.6000 figure.
  • It was an interim monetary policy review, which means there will be no press conference or updated forecasts.

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