MNI BRIEF: RBNZ "Shadow Board" Divided On Rate Hike

A group of New Zealand business leaders and economists who call themselves the "Shadow Board" of the RBNZ is divided over the right policy move for the central bank, with several members advocating against an expected interest rate rise this week.

The NZ Institute of Economic Research maintains a "Shadow Board" which reviews monetary policy, and on Monday released a statement saying that due to the ongoing pandemic lockdowns the RBNZ should leave rates unchanged at its meeting on Wednesday.

"Shadow Board members in the business community highlighted the negative impact of the latest lockdown on businesses, with small to medium businesses hit particularly hard," the statement said. "This led to some Shadow Board members calling for monetary policy to be left unchanged at the upcoming meeting."

The RBNZ's Monetary Policy Committee meets on Wednesday with expectations of an interest rate rise from the current record low of 0.25% with house prices a key driver.

The bank paused to raise rates in August. Other members of the NZIER Shadow Board favoured monetary tightening, although the statement said, "there was a more cautious tone relative to August."