Rate rise this week a close call

Monday 26 April 2004

The central bank is expected to leave interest rates unchanged this week but the odds have narrowed as a fall in the Kiwi dollar is seen fuelling inflationary pressures from a housing boom.

By The Landlord

The Reserve Bank of New Zealand (RBNZ) opted in march to wait and see if a slowing economy would dampen inflationary pressures from a robust domestic economy, after a surprise quarter percentage point rate hike in January, but warned it had another rise in the wings if necessary.

Since then data has indicated that waning immigration and weak export returns look set to curb still-buoyant domestic demand, while inflation in the first quarter remained muted.

Economists said the issue is whether the RBNZ can stomach the upside risks to the inflation outlook from the Kiwi dollar's 5% fall since its March monetary policy statement.


"We believe the RBNZ should invest in some deep breathing exercises and keep the OCR on hold," Westpac chief economist Brendan O'Donovan said.

Read More - Opens in a new window
Commenting is closed

Property News

Key reform will only protect bad tenants

Getting rid of “no cause” termination notices only serves to protect bad tenants and will have a negative impact on the broader community, not just landlords, according to landlord advocates.

House Prices

No stopping Capital price rises

There’s no sign of a slow-down in Wellington’s property prices with Trade Me Property’s latest data showing that asking prices continue to rise solidly.

Commercial

Demand challenges for commercial sector

Vacancy rates in the commercial property sector are set to increase as changing economic conditions dampen demand.

Mortgages

LVR loosening likely - ANZ

LVR restrictions were never meant to be a permanent feature of New Zealand’s housing market and ANZ economists argue that some further relaxing of them could soon be on the cards.

Site by PHP Developer