REPEAT: POV: RBNZ Gov Could Be Risking A.......>

RBNZ: REPEAT: POV: RBNZ Gov Could Be Risking A Communication Mishap

- RBNZ Gov Orr's tenure has been dominated by sharp changes in policy rhetoric

and such swings in language introduce the risk of a communication mishap, if

mkts fail to understand the language at first glance.

- Orr has introduced 2-way interest rate risk via the opening paragraph of the

statement that accompanies the RBNZ's decision, by employing the phrase "the

direction of our next OCR move could be up or down." However, he continues to

conclude with phraseology close to "we will keep the OCR at an expansionary

level for a considerable period to contribute to maximising sustainable

employment, and maintaining low & stable inflation". In spite of a fairly

consistent underlying message, Orr made wholesale changes to the text & the

latest statement omitted reference to biz confidence, a focus of recent rhetoric

(though the RBNZ did note that its econ assessment is virtually unch vs Aug).

- The smoothest path for RBNZ MonPol/communique would see the econ evolve in

line with the RBNZ's expectation, recent GDP figures & biz investment intentions

suggest this may not play out.