Acting Governor of the Reserve Bank of New Zealand (RBNZ), Christian Hawkesby, addressed the media Wednesday following the central bank’s May monetary policy decision, offering insight into the reasoning behind a widely anticipated 25 basis point cut to the Official Cash Rate (OCR), bringing it down from 3.5% to 3.25%.
During the post-meeting press conference, Hawkesby delivered prepared remarks and responded to questions, emphasizing that while inflation is now within the central bank’s target range, the future path for interest rates remains uncertain.
“We did form a consensus projection for the cash rate,” he said, “but there’s a high degree of uncertainty.” He added that the current level of interest rates is now within the so-called “neutral zone,” suggesting neither a stimulative nor restrictive bias for the economy.
Importantly, Hawkesby underlined the committee’s message that monetary policy decisions are no longer on a predetermined path. “The key message is that we have come a long way,” he said. “We’re not pre-programmed on moves now.”
While committee members broadly agreed on the projected trajectory for the cash rate, there was some divergence over the timing of future moves. Despite the rate cut and dovish tone, the RBNZ’s nuanced communication pointed to a more cautious, data-driven approach going forward.
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