VIEW: Westpac note that "the press release.....>

RBNZ: VIEW: Westpac note that "the press release suggested that the RBNZ does

not currently see a need to cut the OCR further. The overall assessment was that

the outlook for monetary policy "has not changed significantly" since the August

MPS. The RBNZ seems to be saying that its actions to date are sufficient. It

noted that the OCR cuts to date have led to lower lending rates and a lower

exchange rate; and it expected low interest rates to generate a pickup in

domestic demand over the coming year. The RBNZ did say that there was room to

cut further "if required." We interpret this as an easing bias rather than a

signal. In other words, the RBNZ views a cut as more likely than a hike, but is

not committing to either at this point. Actually the RBNZ's words were that

there is scope for more "fiscal and monetary stimulus" (our emphasis), which

amounts to a suggestion that the Government should engage in fiscal stimulus.

That's an unusual move for the RBNZ. Overall, the tone of the RBNZ's Review was

in line with what we expected but a little less dovish than markets were

expecting. Consequently, interest rates and the exchange rate rose slightly."