Acting Governor of the Reserve Bank of New Zealand (RBNZ), Christian Hawkesby, offered a cautious yet reflective tone during a press conference on Wednesday, following the central bank’s decision to cut the Official Cash Rate (OCR) by 25 basis points to 3.25%. The move, widely expected by markets, comes amid signs of easing inflation and a shifting economic outlook.
In his prepared remarks and subsequent media Q&A, Hawkesby stressed that inflation is now within the RBNZ’s target range. He framed the decision-making process as a sign of a healthy debate, noting that “the decision to hold a vote on rates was a healthy sign, not unusual at turning points.”
The governor highlighted the uncertainty surrounding the path of future policy. “We did form a consensus projection for the cash rate, but there is a high degree of uncertainty,” he said, adding that “central projections are wide enough for us to not have a bias either way in terms of what the next step is at the next meeting.”
Hawkesby noted that interest rates are now in the neutral zone, suggesting that monetary policy is neither overly tight nor loose. “Being close to neutral means more about feeling your way on policy now,” he explained. “We’ve lowered rates a considerable way and are still working our way through.”
He reiterated that the Monetary Policy Committee is not locked into a predetermined course. “The key message is that we have come a long way—we are not pre-programmed on moves now,” he stated. While the committee agreed broadly on the projected rate path, there were differing views on the precise timing of future adjustments.
Markets responded positively to Hawkesby’s comments. The New Zealand Dollar (NZD) gained ground, with NZD/USD rising 0.30% on the day to trade near 0.5970 at the time of writing.
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