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MNI: External Risks To Accelerate RBNZ Easing Cycle - Ex Econs

Former RBNZ economists share their OCR outlook

MNI (SYDNEY) - The Reserve Bank of New Zealand will continue to ease the official cash rate towards neutral despite recent better-than-expected GDP figures, with an OCR at 2.5% likely by the end of 2025, much lower than current official and market projections, former RBNZ economists told MNI.

The RBNZ is likely to continue reducing the OCR cautiously by 25 basis points at each successive meeting until it reaches what it believes to be neutral, said Geof Mortlock, financial consultant and former financial stability advisor at the RBNZ, estimating this to be around 2.5-2.7%. “They'll be keeping a very careful eye on non-tradables inflation before they take the brakes off too hard on monetary policy,” he said. 

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MNI (SYDNEY) - The Reserve Bank of New Zealand will continue to ease the official cash rate towards neutral despite recent better-than-expected GDP figures, with an OCR at 2.5% likely by the end of 2025, much lower than current official and market projections, former RBNZ economists told MNI.

The RBNZ is likely to continue reducing the OCR cautiously by 25 basis points at each successive meeting until it reaches what it believes to be neutral, said Geof Mortlock, financial consultant and former financial stability advisor at the RBNZ, estimating this to be around 2.5-2.7%. “They'll be keeping a very careful eye on non-tradables inflation before they take the brakes off too hard on monetary policy,” he said. 

Keep reading...Show less