Goldman Sachs: RBNZ's Policy Stance More Dovish Than Anticipated

Deep News
02/18

According to a report from Goldman Sachs economists, the Reserve Bank of New Zealand's monetary policy statement, particularly its forward guidance, was more dovish than expected. Although markets had priced in a 40-basis-point tightening of the Official Cash Rate by 2026, the central bank indicated that the policy environment is likely to remain accommodative for some time. The economists noted that the RBNZ expressed confidence that inflation will decline to the mid-point of the 1-3% target range over the next 12 months, while also cautioning about recent above-forecast headline inflation figures. Given the significant amount of spare capacity in the economy, Goldman Sachs anticipates that a robust economic recovery will be accompanied by moderate inflationary pressures. They stated, "We view the RBNZ's communication today as consistent with a first rate hike being delayed until the fourth quarter of 2026."

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