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MNI BRIEF: RBNZ Hikes Justified as Q3 Retail Sales Rebound

MNI (PERTH)
(MNI) Perth

The Reserve Bank of New Zealand sent a clear message this week over its determination to cool spending, but a rebound in 3Q retail sales showed its aggressive rate hikes are yet to sting New Zealanders' hip pockets.

Third quarter retail sales increased 0.4% q/q, slightly missing estimates for a 0.5% y/y increase, but an improvement on the 2.2% decline in the Q2, data released earlier by Stats NZ showed. However, the faster growth in sales values compared to volumes showed much of the rise was due to rising prices. Spending at department stores and on apparel posted the strongest gains, while spending on electrical and electronic goods fell 14.5% q/q.

RBNZ Governor Adrian Orr implored New Zealanders to tone down their spending after the bank delivered a jumbo 75bp hike to 4.25% on Wednesday. "Think harder about your spending. Think about saving rather than consuming. Just cool the jets," he said. (See MNI RBNZ WATCH: Another 125bp Coming; Brace For Recession)

Robert covers RBA and RBNZ policy and the economy for MNI in Australia.
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Robert covers RBA and RBNZ policy and the economy for MNI in Australia.
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