• This week the RBNZ will release its Monetary Policy Statement.  The Official Cash Rate will undoubtedly be left unchanged – the focus will be on the message the RBNZ delivers.
• From a strategic point of view, the RBNZ will want to continue dampening down expectations that a rate increase will be occurring earlier, in order to encourage households to move onto floating interest rates over the coming months.
• However, by April the RBNZ is likely to find itself in a position where it will need to slow the housing market via a higher OCR to prevent further aggravation of New Zealand’s imbalances and vulnerabilities (not to mention anticipation of inflation).

Read the full PDF report.

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