OCR

2022 - 7 - 13

Post cover — Image courtesy of "New Zealand Herald"

Reserve Bank lifts OCR by 50 basis points to 2.5 per cent (New Zealand Herald)

The Reserve Bank has raised its official cash rate (OCR) by 50 basis points to 2.5 per cent in its latest bid to head off inflation.

"The market reaction to today's decision was very muted. The August review itself may be an opportunity to review the situation. "The Reserve Bank has certainly indicated a peak of around 4 per cent. "In terms of annual mortgage repayments, this equates to an extra $2,050 per year or so for every $100,000 of debt. For one, the OCR will have reached 3 per cent by that point, much closer to the endpoint that the RBNZ envisages. "There was certainly nothing in today's decision to suggest that the RBNZ is about to "It'll be less painful to cut later if the Bank does tighten a bit too quickly now than it would be to have to hike by much more in future and crunch the economy if inflation expectations become well and truly unanchored." "In short, the Bank has got more work to do to ensure it is cooling demand enough to bring inflation back into line with its target," said ASB economist Nathaniel Keall. "And with the risks lingering that the economy could hit the skids sooner than anticipated, an OCR peak of 4 per cent is not guaranteed." The committee said there was a near-term "upside risk" to consumer price inflation and emerging medium-term downside risks to economic activity. "The level of global economic activity, combined with the ongoing supply disruptions largely driven by both Covid-19 persistence and the Russian invasion of Ukraine, continues to generate global inflation pressures," the bank said. The Reserve Bank said its monetary policy committee had agreed that it remained appropriate "to continue to tighten monetary conditions at pace to maintain price stability and support maximum sustainable employment".

Why the RBNZ hiked the OCR - again - Good Returns (goodreturns.co.nz)

The Reserve Bank has made its third consecutive 50 basis point official cash rate increase. Here's what the bank said.

5.85 5.85 5.85 5.85 5.85 Once aggregate supply and demand are more in balance, the OCR can then return to a lower, more neutral, level. In these circumstances, spending and investment demand continues to outstrip supply capacity, with a broad range of indicators highlighting pervasive inflation pressures. In New Zealand, domestic spending remains supported by high employment levels, resilient household balance sheets in aggregate, continued fiscal support, and a strong terms of trade. The Committee is resolute in its commitment to ensure consumer price inflation returns to within the 1 to 3% target range. However, the pace of global economic growth is slowing. The reduction in Covid-19 health-related restrictions is also enabling increased demand. Employment remains above its maximum sustainable level and the Reserve Bank’s core inflation measures are around 4 percent.

Reserve Bank hikes OCR by 50 points (Otago Daily Times)

"However, the pace of global economic growth is slowing." In New Zealand, domestic spending remains supported by high employment levels, resilient household ...

"In these circumstances, spending and investment demand continues to outstrip supply capacity, with a broad range of indicators highlighting pervasive inflation pressures." "Labour and resource scarcity are also contributing to upward price pressures which are currently exacerbated by seasonal illness, a resurgence in Covid-19 cases, and a net outflow of labour abroad. "The level of global economic activity, combined with the ongoing supply disruptions largely driven by both Covid-19 persistence and the Russian invasion of Ukraine, continues to generate global inflation pressures," the bank said.

Reserve Bank keeps blinkers on inflation, raising OCR to 2.5% (Stuff.co.nz)

Third 'double' rate rise this year takes the official cash rate to six-year high.

The Reserve Bank said in its commentary that the pace of global economic growth was slowing. But it put that down to “relief that the Reserve Bank simply held the line, and didn't ratchet up their hawkish rhetoric”. It introduced its statement by saying it was “resolute in its commitment to ensure consumer price inflation returns to within the 1% to 3% target range” and that it remained “appropriate to continue to tighten monetary conditions at pace”. The Reserve Bank said there was “a near-term upside risk to consumer price inflation”, suggesting inflation could rise higher than it had been forecasting. “While it acknowledged the downside risks facing the growth outlook, it is continuing to roll out the tough-talking language about cooling demand and getting inflation under control,” it said in a research note. The Reserve Bank has raised the official cash rate by 50 basis points to 2.5%, sticking closely to the accelerated track that it mapped out in May to get on top of inflation.

OCR decision: Reserve Bank raises official cash rate by 50 basis ... (Newshub)

The Reserve Bank (RBNZ) has delivered its sixth straight interest rate hike in its fourth monetary policy statement of the year.

Reserve Bank lifts OCR by 50 basis points to 2.5 per cent (Newstalk ZB)

The Reserve Bank, along with most central banks around the world, is tightening monetary conditions in a bid to curtail rising inflation. New Zealand's annual ...

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OCR Hike Will Add Millions To Bank Profits | Scoop News (Scoop.co.nz)

Reserve Bank Governor Adrian Orr should start focusing on the needs of New Zealanders instead of how he can deliver more profits into the hands of the ...

And that interest is subsidised by the Reserve Bank which pays the banks interest at the OCR rate on the billions they have sitting in their reserve accounts at the Bank. That balance currently stands at $46 billion. The Reserve Bank should have curbed the avalanche of money creation that has been indulged in by the commercial banks – yet it is still subsidising that lending. While it's true they do pay depositors interest on some accounts, much of the money on deposit is in accounts that don't pay interest.

Triple whammy: RBNZ hikes OCR by 50bp again (The National Business Review)

RBNZ continues at pace with its monetary tightening by raising official cash rate to 2.5%. OCR raised in an attempt to ease inflation.

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Reserve Bank hikes OCR by 50 points (Otago Daily Times)

"However, the pace of global economic growth is slowing." In New Zealand, domestic spending remains supported by high employment levels, resilient household ...

Reserve Bank raises official cash rate by 50 basis points to 2.5 percent (RNZ)

The Reserve Bank has raised the official cash rate to a six-year high and promised more rises until it gets inflation under control.

"The money shots were all here, with 'the committee is resolute in its commitment to ensure consumer price inflation returns to within the 1 to 3 percent target range,' and 'briskly lifting the OCR' remains the best approach." "However, any upside surprises to inflation would up the odds of a continuation of 50bp hikes beyond August and/or a higher endpoint than the 3.5 percent peak we are forecasting." "The committee agreed to continue to lift the OCR to a level where it is confident consumer price inflation will settle within the target range." "The committee is resolute in its commitment to ensure consumer price inflation returns to within the 1 to 3 percent target range." "Once aggregate supply and demand are more in balance, the OCR can then return to a lower, more neutral, level." "Labour and resource scarcity are also contributing to upward price pressures which are currently exacerbated by seasonal illness, a resurgence in Covid-19 cases, and a net outflow of labour abroad."

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