RBNZ: Rate cut demonstrates commitment to meeting inflation target

Following a bigger-than-expected rate cut announcement by the RBNZ, the NZ central bank is out with the key economic projections ahead of Governor Orr’s presser.

Sees official cash rate at 1.21 pct in December 2019 (pvs 1.48 pct)

Sees official cash rate at 0.92 pct in September 2020 (pvs 1.36 pct)

Sees official cash rate at 0.91 pct in December 2020 (pvs 1.36 pct)

Sees official cash rate at 1.59 pct in September 2022

Sees TWI NZD at around 72.8 pct in September 2020 (pvs 72.7 pct)

Sees annual CPI 1.7 pct by September 2020 (pvs 1.7 pct)

Rate cut demonstrates a commitment to meeting the inflation target.

The global economic outlook has weakened.

Low rates, higher govt spending will support demand.