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RBNZ ‘shadow board’ split on cash rate hike recommendation


The Reserve Bank of New Zealand monetary policy meeting is Wednesday, October 6

  • The statement will be at 0200 GMT

The New Zealand Institute of Economic Research (NZIER) runs a ‘shadow board’ of analysts. The Shadow Board is independent of the RBNZ and does not represent what the RBNZ is going to do but rather what their view is the RBNZ should do. 

That is, the Shadows do not preview what they think will happen, but what they think should happen. 

Some of the key points from the NZIER on Shadow Board eliberations:

Shadow Board has become divided over its views on what should happen with monetary policy at the October Monetary Policy Review. 

  • This is due to the ongoing lockdown in Auckland to contain the COVID-19 community outbreak and heightened uncertainty over the economic outlook.
  • Shadow Board members in the business community highlighted the negative impact of the latest lockdown on businesses, with small to medium businesses hit particularly hard. This led to some Shadow Board members calling for monetary policy to be left unchanged at the upcoming meeting.
  • In contrast, other Shadow Board members continued to see tightening of monetary policy as appropriate given the intense inflation pressures in the New Zealand economy. 

Majority still calling for a hike though:

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