Home » News » Financial News » RBNZ’s Tightening Cycle Is ‘Well Advanced,’ Governor Orr Says
a
Newsletter

RBNZ’s Tightening Cycle Is ‘Well Advanced,’ Governor Orr Says

(Bloomberg) — New Zealand’s central bank still has some work to do to tame inflation but the bulk of the heavy lifting is behind it, Governor Adrian Orr said.

More Read from Xtrading

“We believe we still have some work to do, but the good news is because we’ve done so much already, the tightening cycle is very mature, it’s well advanced,” Orr said at an event Tuesday in Wellington.

The Reserve Bank has “a little bit more to do before we can drop to our normal happy place, which is to watch, worry and wait for signs of inflation up or down,” he said.

The RBNZ has raised the Official Cash Rate from 0.25% to 3% over the past year and last month forecast it will rise to at least 4% by early 2023. ANZ Bank New Zealand economists predict the OCR will need to peak at 4.75% next year to sufficiently cool the economy and curb price pressures.

Orr said demand “will be slowing.”

While inflation of 7.3% is “too high,” New Zealand’s rate is lower than in many other countries, he said.

He also noted that while the New Zealand dollar, along with “almost every currency in the world” is falling versus the greenback, boosting the cost of imports, a lot of supply side constraints are easing.

“While the tin may be higher, the cost of getting the tin here is much lower, as well as energy prices, so you’ve got a lot of offsetting positive supply shocks starting to help us,” Orr said.

In a relative sense, New Zealand “sits in a very strong position,” he said. “We’ve come through this extremely well.”

The RBNZ’s next rate decision is on Oct. 5.

More Read from Xtrading

©2022 Bloomberg L.P.

close

We don’t spam! Read our privacy policy for more info.

Disclaimer:                                                                                                                                                                        
This article comes from the third-part, all information on xtrading (including but not limited to text, data, and icons) does not represent xtrading’s views, we do not guarantee the accuracy, authenticity, integrity, validity, timeliness,etc. If we infringe any media or personal’s intellectual property rights unintentionally, please call or write to inform us, we will deal with it in the first time. The information released by xtrading is for reference only, not basis for any investment and transaction , which operate at your own risk.

Related Articles

International News: U.S. Q4 economic growth forecast from 4.3% to 2.8% – Dec. 2nd, 2022

12/02/2022

1. The Atlanta Fed GDPNow model: lowered the U.S. Q4 economic growth...

Singapore Chips Away at Hong Kong’s Hedge Fund Dominance

12/01/2022

Singapore Chips Away at Hong Kong’s Hedge Fund Dominance Singapore Chips Away...

FTX Implosion Prompts Call by DOJ Arm for Independent Probe

12/01/2022

FTX Implosion Prompts Call by DOJ Arm for Independent Probe (Bloomberg) —...

Australian Central Bank Has Traders Primed for New Rate Surprise

12/01/2022

Australian Central Bank Has Traders Primed for New Rate Surprise Australian Central...

Wall Street Turns Bearish on Stocks After Bad Year

12/01/2022

Wall Street Turns Bearish on Stocks After Bad Year Wall Street Turns...

Apple Renames Mixed-Reality Software ‘xrOS’ in Sign Headset Is Approaching

12/01/2022

Apple Renames Mixed-Reality Software ‘xrOS’ in Sign Headset Is Approaching In this...