REPEAT: MNI:New Zealand Infl Expectation Near RBNZ Band Mid-Pt

Repeats Story Initially Transmitted at 02:18 GMT Feb 14/21:18 EST Feb 13

By Sophia Rodrigues

     SYDNEY (MNI) - Inflation expectations in New Zealand remained anchored at

the mid-point of the Reserve Bank of New Zealand's target band, raising optimism

that the RBNZ's forecast for inflation to trend upwards towards the mid-point is

achievable.

     This would allow the RBNZ to keep the monetary policy on hold for longer.

     The quarterly survey conducted for the RBNZ by The Nielsen Company and

published by the central bank Wednesday showed a marginal drop in one-year

inflation expectation but two-year expectation rose slightly. Both remained

close to the mid-point of the 1% to 3% target band. Significantly long-term

inflation expectations also were little-changed around the 2% mark.

     The survey also published view on house price index which showed a marginal

rise in expectation compared with Q4 but remained below Q3 when these views were

first published. Overall, the data showed house prices are expected to rise at a

very slow rate over the next two years.

                                          Q1     Q4

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Inflation 2-year ahead (mean)          2.11%  2.02%

Inflation 1-year ahead (mean)          1.86%  1.87%

Inflation 5-year ahead (mean)          2.09%  2.11%

Inflation 10-year ahead (mean)         2.05%  2.03%

House Price Expectation 1-year ahead   2.45%  2.31%

House Price Expectation 2-year ahead   2.52%  2.01%

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

[TOPICS: MTABLE]