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- RBNZ says communication difficulty delayed rate hike
RBNZ says communication difficulty delayed rate hike
Bloomberg reports that Assistant RBNZ Governor Christian Hawkesby said that New Zealand’s central bank decided not to raise interest rates last week because of communication challenges, not economic risks.
It would have been difficult to explain an increase in the official cash rate on the same day the country entered a lockdown to combat a Covid-19 outbreak, Hawkesby said. He also said policy makers considered raising the OCR by as much as half a percentage point.
The comments leave little doubt that the Reserve Bank is eager to embark on a tightening cycle at its next OCR review on Oct. 6 and won’t be deterred by the current delta outbreak, which prompted the first nationwide lockdown in more than a year. Since the RBNZ held the OCR at 0.25% last week and the outbreak has grown, investors have scaled back bets on an October move, but Hawkesby stressed the central bank is focused on the economic outlook, not the duration of the lockdown.
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