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1. As widely expected, the RBNZ lowered the OCR by 50bps today to 4.75%. That’s still 40bps higher than the RBA cash rate.
The dovishness of the MPC’s statement and the fact that the OCR is still well above the RBNZ’s estimates of ‘neutral’ suggest that another 50bp cut in November - alongside new forecasts - is a very good bet.
The MPC said that it “assesses headline consumer price inflation to be within its 1 to 3 per cent target band in the September 2024 quarter“.
We highlighted before the initial 25bp cut that quarterly underlying inflation had already fallen to around 2.5% on an annualised basis. This alone points to aggressive policy easing.
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