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00:29:17 01-03-2024

RBNZs Hawkesby: Policy is going to stay restrictive for some time yet

The Reserve Bank of New Zealand (RBNZ) Deputy Governor Hawkesby said on Friday that interest rates in New Zealand need to stay restrictive for some time to ensure inflation expectations become fully anchored again while adding that the central bank was not in the position to consider cutting rates.

Key quotes

Restrictive policy needed to ensure inflation expectations anchor at 2%.

Policy is going to stay restrictive for some time yet.

Policy will need to stay restrictive even when the output gap is negative.

We think the output gap now is around zero, if not a bit negative.

We don't have a lot of room to maneuver when it comes to future inflation shocks.

We are on the right path with inflation, have to hold our course.

Not in a mindset to cut rates now, will be cutting sometime down the track.

Market reaction

The NZD/USD pair is trading lower by 0.05% on the day to trade at 0.6084, as of writing.

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