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Preview - February 2021: Treading a Tightrope

RBNZ

This week's Monetary Policy Statement comes after a lengthy hiatus and RBNZ policymakers have a lot to digest. The three months since the last meeting witnessed a run of strong data signals, which resulted in money markets pricing out any further OCR reductions through the year-end and prompted a number of sell-side desks to ditch their earlier easing bets. Last year's speculation about potential for negative interest rates has become a fading memory and Governor Orr faces a fresh challenge – how to tip hat to solid economic data while maintaining a credible dovish bias.

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