VIEW: ASB Look For The RBNZ To Hold Fire Today

ASB expect the RBNZ will hold fire today, "keeping the OCR steady at 0.25%. Given that NZ has entered into a snap Level 4 lockdown (the strictest level in NZ), it is logical that the RBNZ will pause until more certainty over the extent of the community COVID outbreak and lockdown is established. The whole of NZ will be in Level 4 for at least 3 days, with Auckland and the Coromandel Peninsula region in Level 4 for at least 7 days. With the Government stepping in with financial support, it also makes little sense for the RBNZ to work in the opposite direction by triggering a lift in borrowing rates."

• "Provided the lockdown is short and doesn't change the underlying economic picture, we would still anticipate the OCR reaching 1.5% by the end of 2022. But the situation is still very fluid. The cases detected show the virus has already spread, which starts tilting the situation to one in which some form of restrictions are likely to continue until the Government is certain any community transmission has been stamped out."