MNI BRIEF: RBNZ Says Rate Rise Forecast "Not Forward Guidance"

Economic forecasts which include a rise in official interest rates in the second half of 2022 are "not forward guidance" but are based on confidence that the economy would reach employment and inflation targets, according to Reserve Bank of New Zealand Assistant Governor Christian Hawkesby.

Speaking at a press conference following the release of the RBNZ's quarterly Monetary Policy Statement, Hawkesby cautioned that the forecasts are "conditional." "We will revisit the forecasts every six weeks and every three months," said Hawkesby.

The NZD jumped sharply against the USD to 73 US cents after the RBNZ included estimates for the Official Cash Rate in its forecasts for the first time, with an interest rate rise in September 2022 and beyond. The RBNZ held the OCR at the record low of 0.25% Tuesday, but its forecasts have the rate increase out to 1.5% by December 2023.