Bollard leaves rates unchanged but talks tough

"Dr Bollard basically followed the script. He delivered a statement on the hawkish side of the spectrum," says Sean Comber, an economist at ANZ/National Bank.

If it hadn’t been for weaker data over the last month, Bollard could have raised rates and he still might if there’s any strong data over the next couple of months, he says.

The key message Bollard was trying to convey is that interest rates aren’t going down any time soon, despite market expectations that they will either in the December or March quarters, Comber says.

With the interest rate futures market virtually unchanged from before the monetary policy statement was released, it seems the market remains sceptical about Bollard’s message.

Read More - Opens in a new window