Reserve Bank Governor Alan Bollard is not expected to change the official cash rate from its current 2.5% this morning – but he may change his outlook on the economy.The review of the official cash rate is to be released at 9am and no market economi
Reserve Bank Governor Alan Bollard is not expected to change the official cash rate from its current 2.5% this morning – but he may change his outlook on the economy.
The review of the official cash rate is to be released at 9am and no market economists are expecting any change in the rate today.
But Dr Bollard could alter his stance on when he expects to begin lifting the rate form its current stimulatory levels.
Economic data released this week shows an economy on the turn. Manufacturing output was up in the figures released on Monday, and the terms of trade, released yesterday, show a rebalancing, with the largest quarterly increase since March 1976.
The trade figures also show a surge in the volume of capital goods being imported, which shows businesses are picking up their investment in plant and machinery.
The Reserve Bank’s current stance is for no rate rises until “around the middle of the year” – terminology which is deliberately vague and which gives the central bank the option of lifting the rate any time between the end of April – its next review of interest rates – to September.
The more likely timing though is at its June 10 or July 29 meetings – unless Dr Bollard changes his stance this morning.
[Coverage of today’s release will be available on NBR 24/7 from 9.05am ]
