KiwiBank: The RBNZshould pause rate hikes during the emergency
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The count down to the Reserve Bank of New Zealand interest rate meeting is under way as it comes together on the 22 February next week to decide on where to set the Offical Cash Rate, OCR.
Contrary to the belief in the markets that the RBNZ needs to continue hiking rates at a rapid pace, KiwiBank says the RBNZ should pause its rate hikes, citing a national state of emergency. The suggestions comeson the heels of Cyclone Gabrielle which is causing huge devastation, especially in Hawkes Bay. The New Zealand prime minister, Chris Hipkins, was expected to travel to Gisborne on Thursday to meet residents and first responders on the ground.
KiwiBank said in a note today.
Meanwhile, analysts at Westpac Bank said that they expect the OCR to rise by 50 basis points to 4.75% next week. ”Inflation has remained strong, but not quite to the degree that the Reserve Bank was bracing for at its November policy review.”
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