RBNZ’s Orr: Projections see normalizing of monetary policy by this time next year

FX

Early Thursday morning in Asia-Pacific, Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr crossed wires, via Reuters, while speaking before parliament’s Finance and Expenditure Committee.

The RBNZ Boss reiterated the New Zealand (NZ) central bank’s statements suggesting a rate hike by late 2022 while citing optimism at home and abroad.

Key comments…

Global economic outlook has continued to improve.

NZ labor market very resilient.

In the near term expects the inflation rate to be above the midpoint of its target range.

Expects house price growth to slow dramatically in H2.

Positive outlook driven by vaccine rollout, reduced health risks.

Projections see normalizing of monetary policy by this time next year.

If there was a negative shock in the future we will sustain or increase monetary stimulus.

FX reaction

NZD/USD traders ignored the upbeat comments from RBNZ’s Orr as nothing new came out from the speech than what was already discussed the previous day. Hence, the kiwi pair consolidates the RBNZ-led gains around 0.7280-85 by the press time.

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